Expense vs. vendor bill: which to use

Use an expense for money already spent; use a bill when you owe a vendor and will pay later.

The difference

An expense represents a cost you have already paid — it does not create an account payable.

A vendor bill represents an amount you owe and will pay later. Bills create an accounts-payable balance and can be matched to purchase orders and goods receipts.

If you want the amount to appear in Accounts Payable and in payment runs, record a bill rather than an expense.

See also