AP, Bills & Expenses Glossary
Plain-English definitions for accounts payable, bills, expenses, and the key terms you'll come across managing what your business owes.
Accounts Payable (AP)
Money your business owes to suppliers or vendors for goods or services received but not yet paid for. Sits on your Balance Sheet as a current liability until the bill is paid.
AP Aging
A report that groups your outstanding bills by how long they've been unpaid — typically 0–30 days, 31–60 days, 60–90 days, and 90+ days. Used to track what's coming due and prioritize payments.
Accrual
Recording an expense in the period it was incurred, even if payment hasn't happened yet. When you enter a bill in QBO before paying it, you're accruing the expense. This gives a more accurate picture of your costs in each period.
Bill
A supplier's invoice for goods or services you've received but haven't paid for yet. Entering a bill in QBO records the expense and creates an accounts payable. Different from an expense, which is recorded at the time of payment.
Early Payment Discount
A discount a supplier offers if you pay before the standard due date. Written as "2/10 Net 30" — meaning 2% off if paid within 10 days, otherwise the full amount is due in 30 days.
Expense
In QBO, an expense is a transaction where payment happens immediately — at the time of purchase, by card or bank transfer. Different from a bill, which records a purchase you'll pay later. Both are expenses on your Profit & Loss.
Input Tax Credit (ITC)
The GST/HST you paid on a business purchase that you can claim back against the GST/HST you collected. Only available to businesses registered for GST/HST. Your bookkeeper tracks ITCs as they enter your bills and expenses.
Reimbursement
A payment from the business to an individual (owner or employee) to repay a business expense they covered personally. Not income — it's the business repaying money spent on its behalf.
Shareholder Loan
For corporations — an account that tracks money the corporation owes to a shareholder (or that a shareholder owes to the corporation). When a shareholder pays a business expense personally, the corporation owes them that money, which is tracked in the shareholder loan account.
Vendor
A supplier or service provider your business buys from. In QBO, vendors are stored in your vendor list with contact details and payment terms, making it easy to enter bills and track what you owe each one.
Void
Cancelling a transaction in QBO while keeping the record in your books (marked as $0). Always void rather than delete — voiding preserves the audit trail. Deleted transactions disappear entirely, which creates gaps in your records.