QuickBooks 2016 All-in-One For Dummies

Chapter 2

Paying Vendors

In This Chapter

• Working with purchase orders
• Recording receipts and bills
• Sending payments to vendors
• Using the other Vendor menu commands

You can make the process of tracking vendor information as simple or as sophisticated as you like. In this chapter, I assume that you’re going for sophisticated. However, you can make vendor management simpler by not using purchase orders or an accounts payable system.

You decide whether to use purchase orders and whether to track accounts payable (amounts that you owe vendors) as part of setting up QuickBooks. You can change your decision about using purchase orders or accounts payable later. To do this, you choose the Edit ⇒ Preferences command. For more information, refer to Book II, Chapter 3.

Creating a Purchase Order

A purchase order serves a simple purpose: It tells a vendor that you want to purchase some item. In fact, a purchase order is a contract to purchase.

Many small businesses don’t use purchase orders. But when they grow to a certain size, many businesses decide to use them because purchase orders become permanent records of items that they’ve ordered. What’s more, using purchase orders often formalizes the purchasing process in a company. For example, you may decide that nobody in your firm can purchase anything that costs more than $100 unless he or she gets a purchase order. If only you can ...