Expenses in QuickBooks Online — More Than Just “Paying a Bill”

Understanding Bills, Checks, and Expenses — and how they shape your reports

You probably don’t need anyone to tell you that money’s going out of your organization — but how you record it in QuickBooks Online makes a bigger difference than most folks realize. Whether it’s paying rent, reimbursing a staff member, or covering costs for a youth program, QBO offers different tools for different types of payments — and using the right one matters.

In this post, we’ll cover:

• The difference between Bills, Expenses, and Checks

• How those choices impact your Accounts Payable, Profit & Loss, and Cash Flow

• Real-world examples for businesses, churches, and nonprofits

• When to use what — and when to call your bookkeeper

Expense, Bill, or Check — What’s the Difference?

If you're confused by these three, you're not alone. Let’s break it down with a simple analogy:

• A Bill is a promise to pay.

• An Expense is money already gone.

• A Check is the way you sent it.

 Bill

• You received a bill but haven’t paid it yet

• Creates an Accounts Payable (A/P) entry

• Great for tracking what you owe vendors

• Use when payment will happen later

Think of it as receiving an invoice from your electric company — due in 30 days.

Expense

• You paid immediately with cash, debit card, or ACH

• Records the outflow directly, no A/P involved

• Best for one-off, paid-on-the-spot purchases

Buying office supplies at the store and swiping your card? That’s an Expense.

Check

• Just like an Expense — but tied to a physical check

• Use this only when you’ve written or printed a check

• Still counts as immediate payment, no A/P created

When to Use Bills vs. Expenses

Scenario	Use a...
Vendor sends an invoice due next month	Bill
You pay a contractor via debit card today	Expense
You cut a paper check for a speaker fee	Check
Paying utilities set up on autopay	Expense
Recording a grant disbursement to a partner	Bill or Check depending on timing

Bills = track what’s owed. Expenses/Checks = record what’s paid.

Bills and Accounts Payable: What You Need to Know

When you enter a Bill, QuickBooks Online logs the amount under Accounts Payable — your running total of what you owe others.

Until the bill is paid:

• It shows up on the Balance Sheet under liabilities

• It does not affect the Cash Flow Statement (yet)

When you pay the bill:

• Cash goes down

• A/P goes down

• Now it hits the Cash Flow Statement

  
  

Pro tip: Pay bills directly through QuickBooks Online’s Pay Bills workflow — it links your payment to the original bill and keeps your records clean.

How This All Shows Up in Reports

Let’s say your nonprofit receives a $500 invoice for event space rental in August, due in September:

• You enter a Bill in QuickBooks Online in August

• It shows up on your Profit & Loss report as an expense in August

• But it doesn’t hit your Cash Flow Statement until September, when you pay it

  
  

This is especially important if you’re using accrual basis accounting (which most nonprofits and larger businesses do, at least at tax/reporting time).

Examples for Nonprofits and Churches

Here are a few typical expense scenarios — and how to handle them in QBO:

Scenario	QuickBooks Online Entry Type
Utility bill received but not paid yet	Bill → Pay Bill later
Reimbursement to a volunteer (already paid)	Expense or Check
Contractor invoice for worship event	Bill → Pay Bill later
Program supply purchase with church card	Expense
Grant awarded to a partner organization	Bill (track until paid) or Check (if immediate)

These distinctions matter not just for bookkeeping — they affect how clean and compliant your reports are.

Expenses and Cash Flow: Why It All Matters

QuickBooks Online helps you see two key things:

1. Profit & Loss (P&L)

This shows what you’ve earned and spent during a time period — regardless of when cash moved.

• Bills show up on the P&L when entered, not when paid

• Expenses show up when paid

  
  

2. Cash Flow Statement

This shows when the money actually left your account

• Bills don’t affect this until paid

• Expenses and checks hit it right away

Want your reports to tell the truth? Enter your expenses correctly — even if you’re the one paying them.

Common Mistakes to Avoid

• Entering a bill and then recording a separate expense — this duplicates the cost

• Paying a bill without using “Pay Bills” — this breaks the link

• Using Checks when you paid by card or ACH — checks should only be for printed/written checks

• Recording everything as Expenses — you lose visibility into what’s owed

  
  

Bottom Line

QuickBooks Online gives you the tools to track expenses accurately — but only if you use the right one for the job. When you do:

• Your Accounts Payable stays up to date

• Your Profit & Loss reflects real activity

• Your Cash Flow Statement makes sense

• Your reports don’t surprise your board (or your bookkeeper)

  
  

Need help untangling your expense entries or cleaning up A/P?Let’s walk through your QBO file and set up a workflow that makes sense.Contact me here to get started.