When you receive a bill from a vendor/supplier, you can enter it as a bill and then wait to pay it until it's due.
Why do this?
You could just pay the expense right away, but when you record the bill and wait to pay it, you can:
- Keep your money longer. You can use it for other business needs in the meantime.
- Spend less time paying bills by batching up payments to the same vendor/supplier.
- Run reports, such as the A/P Aging Summary, so you know how much you owe at any given time.