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How to Record a Vendor Bill and Pay It

In short

Go to Accounts → Bills → New Bill, enter the bill number, vendor and date, add the lines with rate and GST, and click Create Bill. Pay it from Accounts → Payments → New Payment by choosing the bill under Against Bill; the bill's Amount Paid and Balance Due update and it shows Partial or Paid.

Key facts
WhereAccounts → Bills / Accounts → Payments
Who can do itAdmin and accounts.
Steps6

Step by step

  1. 1

    New bill

    Go to Accounts → Bills (Vendor Bills) and click New Bill. The New Purchase Bill form opens.

  2. 2

    Basic Info

    Enter Bill Number, Vendor and Bill Date (required). Pick a Purchase Order to fill the vendor from it, or choose -- No PO (Direct Bill) --. Add Due Date, Vendor Bill No, Vendor Bill Date, Discount Amount (₹), TDS Amount (₹) and Status.

  3. 3

    Items

    On the Items tab click Add Item for each line: Description, Quantity, Rate (₹) and GST Rate (%) are required (GST defaults to 18), with HSN Code and Unit. Subtotal, Taxable Amount, Total GST and Total Amount are worked out. Click Create Bill.

  4. 4

    Record the payment

    Go to Accounts → Payments and click New Payment. Choose the Vendor and the bill under Against Bill (Optional), or -- Advance Payment (No Bill) --, and enter Amount (₹) and Payment Mode — Cash, Cheque, NEFT, RTGS, UPI or Card.

  5. 5

    Payment details

    Add Payment Date, Transaction Reference, Cheque Number and Cheque Date for a cheque, any TDS Amount (₹) and a Narration. Click Create Payment.

  6. 6

    Check the bill

    The bill now shows the new Amount Paid and Balance Due, and its status becomes Partial or Paid. The Vendor Bills list totals Pending, Paid and Outstanding.

Common questions

Can I pay a vendor without a bill?

Yes. On New Payment choose -- Advance Payment (No Bill) -- under Against Bill. The payment is recorded against the vendor without changing any bill.

How does a bill become Paid?

Each payment made against it adds to its Amount Paid and lowers its Balance Due. When something is still due it shows Partial; when nothing is due it shows Paid.

Where do I enter TDS?

In TDS Amount (₹) on the bill and on the payment. Check the right section and rate in the TDS rate chart before you enter it.

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