What is the difference between recording a bill and recording an expense?

Both expenses and bills are used to record an expense amount but in different scenarios.

You record a bill when your vendor or supplier sends an invoice for the purchase you made. You use bills to keep track of the money you owe your vendors or suppliers.

Examples of when you can record a bill are:

• You receive an invoice from your vendor for the supply of raw materials required to manufacture your company’s product.
• You subscribe to a service and receive a monthly bill for the service.
• You rent a property for your business.

You can record an expense when it is incurred or when the payment is made. You will not be able to pay for it at a later point in time.

Examples of when you can record an expense are:

• You have paid for office supplies with your company credit card, and you need to record the expense you incurred.
• You reimbursed an employee for a business-related expense they incurred, such as travel or meals.