Efficient vendor management is essential for maintaining strong business relationships, optimizing purchasing processes, and ensuring financial accuracy. QuickBooks Online, a popular cloud-based accounting software, offers powerful tools and features to help you effectively manage your vendor relationships—from creating and tracking purchase orders to organizing vendor information.
In this article, we’ll discuss the vendor management features in QuickBooks Online and how to set up and manage vendors in QuickBooks.
Vendor Management Features of QuickBooks Online
QuickBooks Online offers a dedicated Vendor Center where businesses can centrally store and organize vendor information. This feature allows you to create, edit, and manage vendor profiles with detailed contact information, payment terms, tax details, and notes. It serves as a central repository for all vendor-related data, making it easily accessible for quick reference. You can access the Vendor Center by clicking on Expenses on the left menu bar and then selecting the Vendors dropdown.
Vendor Center in QuickBooks Online
The Vendor Center includes shows a list of all your vendors and suppliers and options to create a bill, expense, check or purchase order for a specific vendor. You can set up a new vendor by clicking the New vendor button.
Purchase Order Management
With QuickBooks Online, you can create and track purchase orders to efficiently manage your procurement process. The Purchase Order feature enables you to generate purchase orders with vendor-specific details, item quantities, pricing, and delivery dates. You can easily track the status of open purchase orders, receive items against them, and match them with vendor bills for accurate record-keeping.
To create a new purchase order, click the small dropdown arrow under the Action column, and then select Create purchase order.
Purchase order entry form in QuickBooks Online
Bill Management and Payment Tracking
The bill management feature in QuickBooks allows you to handle vendor bills and track payment details efficiently. You can record vendor bills, enter due dates, and manage payment terms. QuickBooks also provides options to schedule recurring bill payments, set up reminders for due dates, and track outstanding balances. This ensures timely payments and helps in managing cash flow effectively.
You can create a new bill directly from the Vendor Center or by clicking +New on your dashboard and selecting Bills.
Bill entry form in QuickBooks Online
While QuickBooks Online has no dedicated messaging feature, it helps facilitate communication by allowing you to add notes and attachments within the vendor profile. You can add notes to record specific instructions, special arrangements, or any other relevant information that you want to capture for future reference. This feature provides a convenient way to communicate important details internally within your organization or to share specific instructions with your team members regarding a particular vendor.
Reporting and Analysis
With QuickBooks Online, you can general accounts payable reports that provide valuable insights into vendor-related data. You can generate reports on vendor expenses, outstanding bills, and payment history. These reports help you analyze spending patterns, evaluate vendor performance, and make informed decisions about your vendor relationships.
Click Reports in the left menu bar and locate the specific report you wish to access (i.e. Unpaid bills).
Sample Unpaid Bills report in QuickBooks Online
Integration with Online Banking
QuickBooks seamlessly integrates with online banking services, allowing you to link vendor transactions with your bank accounts. This feature simplifies the reconciliation process, ensuring that vendor payments and transactions are accurately reflected in your financial records.
Vendor Tax Management
QuickBooks Online also helps you manage vendor tax-related information efficiently. You can track tax details, apply tax rates to vendor transactions, and generate tax-related reports. This feature ensures compliance with tax regulations and simplifies tax reporting processes.
For detailed instructions on setting up and managing vendors in QuickBooks Online, watch the video below.
Effective vendor management plays a vital role in the success of your business. By leveraging the features provided by QuickBooks Online, you can centralize your vendor management tasks and improve your overall business operations.