A book in which an account of bills of exchange and promissory notes, whether payable or receivable, is stated is known as bill book. There are two types of billbooks in accounting:
A bill payable book is an accounting ledger that records and tracks a company’s outstanding bills and payment obligations. It helps businesses manage their liabilities by ensuring that payments are made on time. It contains the details of the amount owed, the due date, the creditor’s name, and any other relevant payment terms. Some businesses maintain bill books for service invoices, utility bills, phone bills, and short-term loans.
Records the amount a company owes to suppliers for credit purchases. In a balance sheet, bills payable are considered a liability.
In accounting, bills payable are recorded as the details of company owes to suppliers for credit purchases. Accounts Payable are reflected in credit entry. When the bill is paid, Accounts Payable is reduced with a debit entry, and Cash is decreased with a credit entry.
Here are the following details should be included in the bills payable account format:
1: Date: It should have the date of each transaction related to bills payable.
2: Supplier’s detail: It should include the name of the vendor or supplier, the invoice number, and any other identifying information that appears on the bill or invoice.
4: Credit Entry: In the credit column, the decrease in the amount owed should appear. When a bill is paid, or a payment is made towards the outstanding balance, record the quantity or credit purchases.
5: Total: a “total” row at the bottom of the “Debit” and “Credit” sections so you can figure out how much you owe in total.
6: Due date: it should be mentioned the date by which the payment for the bill is due.
7: Payment Reference: To keep track of payment information, you can add a column mentioning the payment made against a particular bill.
8: Past Due: Normally, Some businesses would like to monitor the aging of bills payable, Therefor they add additional columns to classify bills by their age (e.g., current, 30 days past due, 60 days past due, etc.).
The format of Bills payable is given below
| Date | Supplier detail | Credit | Debit | Due Date | Payment reference | Past due |
| Total | – | – | – |
Bills Receivable book:
Accounts receivable refers to the amount that a company is entitled to receive from its customers for goods or services sold on credit. In other words, it is the amount that the customer owes to the company in respect of contractual obligations. Accounts receivables are also known as debtor, trade debtors, bills receivable, or trade receivables.
In a balance sheet, bills receivable are considered an asset.
Here are the following details should be included in the bills receivable account format:
- Acceptor’s name
- Date of the bill
- Due date
- Amount
- Term
- Place of payment
- Arrears
| Acceptor’s name | Date of the Bill | Due date | Amount | Term | Place of payment | Arrears |
Note: A crucial point regarding bill receivables and bills payable books is that they don’t record the transactions identifying with the bills. For example, identifying with bills discounted, endorsement, retirement, renewal, and so forth have a passing reference in these books.
The benefits of maintaining a bill book help business entities to get an overview of creditors, keep payment systems up to date, monitor outstanding bills, and Analysing reasons for non-payment.
Related posts
