Thank you for reading this topic and for your interest. @NicoleObregon.
- Select Chart of Accounts from the List menu.
- Click New from the Account drop-down menu.
- Continue after selecting an account type.
- In the Account Name field, type the name and an optional account number.
- When you’re finished, click the Save & Close button.
You can contact your accountant to confirm which account type the Utility-Income account should go under to ensure your books are accurate.
If you have any other questions, please contact us again. We’re always willing to assist.
Are utilities a cost or a benefit?
A retailer’s or a service company’s utility bill is an expense. The utility bill is an expense for the time indicated by the meter reading dates under the accrual approach of accounting.
The utility bill for a manufacturer is more complicated. For the period specified by the meter reading dates, the utility bill for its selling and general administration will be an expense. The cost of utilities for direct and indirect manufacturing operations, on the other hand, is included in the manufacturing overhead. The utility bill will be assigned or allocated to the units produced as a result. To put it another way, the utility cost will be tied to the number of units produced. Some of the utility costs will be attached to the inventory units and hence will be included in the asset inventory cost. Some of the utility costs will cling to the units that have been sold and become part of the cost of goods sold expenditure.
What is the best way to keep track of my utility bills?
In a nutshell, you debit an asset or an expense account and credit accounts payable to record the bill or invoice. You debit accounts payable and credit cash when you pay a bill.
In QuickBooks desktop, how do I enter bills?
- Expenses – Keep track of bills for business expenses including phone service, rent, and utilities.
- Items – Keep track of everything your company buys, sells, or resells in the course of business, including products, shipping and handling fees, and discounts.
- Select To keep track of the bill, save it.
- The date on which you received the bill.
- The total amount of the bill is called the amount.
- Due date – The bill’s due date.
In QuickBooks online, what is the difference between a bill and an expense?
A bill is technically an expense. They do, however, have two separate meanings in QuickBooks.
When you pay with cash or check for a product or service for your business. It’s also an expense if you pay using a credit card, Paypal, or something similar online. At the moment of purchase, the money has already left your company.
A bill is created when you acquire and receive a product or service but do not pay for it immediately away. You’ve paid for the item, but the funds will not leave your company’s bank account until later.
You can see overdue bills using Quickbooks’ numerous reports. If you record a cost for something that should be a bill, it will not appear on those reports.
You can see overdue bills using Quickbooks’ numerous reports. If you register a bill as an expense, it will not appear on those reports, and you will be unaware that you owe money.
Allow me to demonstrate how to enter a bill and an expense in QuickBooks.
Step 1: Select A Vendor
From the drop-down option, choose the seller who sent you the bill. If you haven’t already, click ” and follow the steps in How To Add Vendors In QuickBooks Pro.
QuickBooks will automatically add the vendor’s address if you’ve already entered it. Take a moment to double-check the address, or manually enter it if required.
Step 8: Enter Expenses Or Bill Items
In accordance with the “You can enter the spending amount and pick the appropriate account on the Expenses tab. If you wish to enter a specific product or item from your bill, select it from the drop-down menu “Go to the Items tab and fill in the blanks.
Step 9: Save The Bill
Finally, if you’re planning on writing another bill, click “Save & Close” or “Save & New.”
By going to “Home” and selecting “Pay Bills,” you may now view your bills in the Bill Tracker or make payments.
Check out the QuickBooks Community or call QuickBooks directly for help with problems. Don’t miss the rest of our QuickBooks Desktop Pro 101 Series to learn how to set up live bank feeds, reconcile a bank account, add vendors, and more.
Are you feeling overburdened by QuickBooks Pro? It might be time to make the switch to QuickBooks Online. QBO is simple to use, cloud-based, and cost-effective. Best of all, your QuickBooks Desktop data can be effortlessly imported into QuickBooks Online. For more information, see our QuickBooks Online review.
Are you tired of QuickBooks Pro? Make the change to QuickBooks Premier. It’s the same QuickBooks Desktop software you’re used to, but with additional users and industry-specific capabilities, as detailed in our QuickBooks Premier review.
On a balance sheet, where do utilities go?
Customer debt, contrary to popular belief, does not appear in a utility’s financial statements in the same way that other “debt” items do. Unpaid bills, in reality, are not classified like debt at all, but rather as an asset, because the utility expects to be paid part of the money owed to them at some point. Customer debt is thus recorded as accounts receivable, an asset rather than a liability, in a utility’s balance sheet. (If you want to learn more about how to assess a utility’s liabilities, check out our blog post on utility debt risk.)
Financial Statement Sleuthing 101
Let’s say you want to figure out what’s up with a utility’s delinquent payments in light of all of this. Returning to Western Pennsylvania, it turns out that Duquesne Light is the primary power distribution firm in Pittsburgh, so we may begin by reviewing Duquesne Light’s financial accounts. Unfortunately, Duquesne was formerly a publicly traded firm, but it is currently controlled by Macquarie Group, an Australian corporation. Unfortunately, while the Macquarie Group’s financial papers are out to the public, the corporation is so large that it’s difficult to separate anything relevant to Duquesne.
As a result, a comprehensive examination of Duquesne’s financial accounts is impossible. Continuing our investigation, we may check into a different, stand-alone utility whose financial statements are available to the public to get a feel of how consumer debt is handled. In North Carolina, Duke Energy is a good example. I began my search on Duke’s investor relations portal, which provides quick access to a range of documents. It may be tempting to open the company’s 2014 Annual Report (the most recent report), but resist! Annual reports are great for photographs of happy people and young children, but we want the real figures. As a result, skip the fancy photos and jump to Duke Energy’s 2014 Form 10-K. When we want to discover more about a company’s finances, we should start here.
Here are a few pointers on how to navigate a 10-K, which in Duke Energy’s instance is only 275 pages long:
If you know exactly what you’re looking for, you can:
- The first step is to skip through the first few pages and head right to the table of contents. Is it possible to find what you’re looking for? Get right to the point.
- Use the Find feature to search the document for those terms if you’re looking for anything specific that isn’t listed in the table of contents but has a unique word or two to describe it (only use this technique if your search terms yield fewer than 20 results or so).
If you’re not sure what you’re looking for, try these suggestions:
- Start with Item 1: “Enterprise.” What exactly does this business do? What is their source of income?
- Continue to Item 1A, “Risk Factors.” This section offers a fascinating list of all the numerous things that could have an impact on the utility’s financial results, either directly or indirectly, via altering operations.
- Take a look at the part titled “Financial Statements.” This is not to be confused with the “Selected Financial Data” part, which is less thorough and lightweight. The Financial Statements Section of Duke Energy’s 10-K includes sections for the entire company as well as each business unit. Look at the statements for a specific business unit if you’re interested in that one; otherwise, look at the statements for the entire company (“Duke Energy Corporation).
- Start with the Consolidated Balance Sheets and the Consolidated Statement of Cash Flows, regardless of which set of Financial Statements you’re looking at. If necessary, branch out to other statements.
I knew I was looking for information about unpaid customer bills in this case, but a search of the 10-K for “unpaid” yielded nothing. A second search for “unbilled, nevertheless,” yielded several results, including this portion on page 123:
When a service or a product is delivered, revenues from electricity and gas sales are recognized. Unbilled revenues are calculated by multiplying projected amounts of energy delivered but not yet billed by customer billing rates. Seasonality, weather, customer consumption patterns, customer mix, average pricing in effect for customer classes, and meter reading schedules can all affect unbilled income dramatically from one period to the next. On the Consolidated Balance Sheets, unbilled revenues are reflected in Receivables and Restricted receivables of variable interest entities…. In addition, Duke Energy Ohio and Duke Energy Indiana sell nearly all of their retail accounts receivable, including unbilled revenue receivables, to an affiliate, Cinergy Receivables Company, LLC (CRC), on a revolving basis and account for the transfers of receivables as sales. As a result, the receivables sold are not shown on Duke Energy Ohio and Duke Energy Indiana’s Consolidated Balance Sheets.
Unpaid invoices are not viewed the same as debt, according to this wording, and instead appear on the asset side of the balance sheet, under accounts receivable. This is because unpaid bills represent money that the firm hasn’t yet received but expects to, and Duke has already “given away the electricity” for which the bills were issued. Duke Energy transfers the asset of those receivables to a collections company (Cinergy Receivables Company) in Ohio and Indiana, and Cinergy pays Duke Energy a fee for the right to collect on those accounts. Cinergy is likely to pay a fraction of the actual amount of overdue invoices because they know they won’t be able to collect on all of them, and Duke records the money as sales revenue.
So, while unpaid bills are unquestionably distinct from utility debt, how do the two compare in terms of magnitude? To put these figures in context, Duke Energy Carolinas has $776 million in accounts receivable (not all of which is delinquent bills), with $33.8 billion in total assets and $7.6 billion in long-term debt. As a result, delinquent bills are a drop in the bucket.
Understanding private sector financial accounts is crucial for a lot more than just addressing queries about overdue debts. To fill finance or knowledge deficiencies, the public sector now frequently partners with the private sector (see the EFC’s current initiative on public-private partnerships and alternative service delivery models for water utilities). Even if you’re not a millionaire stockholder or run a hedge fund, spending the time to review a potential partner’s financial documents might be a good investment.
Utilities is a sort of account.
As of the balance sheet date, a current liabilities account reports the amounts owed to utility companies for electricity, gas, water, and phone. If the company has not received a utility bill, it will have to estimate the amount owed for the service it has utilized up until the balance sheet date. The amounts owed are frequently included in Accounts Payments rather than having a separate account for utilities payable.
Utilities are a sort of spending.
The cost of power, heat, sewer, and water during a reporting period is referred to as utilities expense. Expenses for ongoing telephone and internet service are sometimes included in this category. Because there is frequently a fixed fee component as well as a variable price based on actual usage, this item is classified as a mixed cost.
Is paying for utilities an expense?
What is the cost of utilities? The cost of using utilities such as power, water, waste disposal, heating, and sewage is known as utilities costs. Expenses are incurred throughout the reporting period, computed and accumulated for, or payment is made.
Which entry would be used to record a utility bill payment?
A debit to Utilities Expense and a credit to Cash would be included in the journal entry to indicate the payment of the current month’s utility bill.