Overview

Accounts Payable (AP) tracks money your shop owes to vendors. When you receive a vendor invoice for supplies, services, or equipment, you record it in the system as a bill. The system tracks each bill's status, due date, and outstanding balance so you always know what you owe and when it is due.

When you make a payment to a vendor, you record it against the bill and the balance reduces. This gives you a clear, real-time picture of your upcoming financial obligations and helps you avoid late payments — and the late fees or strained vendor relationships that come with them.

Bills can be created manually or generated automatically from a received Purchase Order. Creating bills from POs saves time and eliminates the risk of data entry errors. You can find Accounts Payable under Accounting › Bills in the left sidebar.

Creating a Bill

From a Purchase Order (recommended)

The fastest and most accurate way to create a bill is from a received Purchase Order. Open the received PO and click Create Bill. The system generates a bill pre-filled with all line items, quantities, and prices from the PO — linked to the vendor and expense accounts automatically. See the Purchase Orders help page for step-by-step instructions.

Manually

To create a bill that is not linked to a PO — for example, a utility bill, a service invoice, or a vendor charge that arrived without a matching order:

Go to Accounting › Bills and click New Bill.
Select the Vendor. The vendor's default expense account and payment terms are applied automatically.
Enter the Bill Date (the date on the vendor's invoice) and the Due Date (calculated from payment terms, but you can override it).
Enter the vendor's own Reference Number (their invoice number) so you can cross-reference it if the vendor contacts you.
Add one or more line items:
- Expense Account — the accounting category this cost belongs to (e.g., Cost of Goods Sold, Shop Supplies, Equipment Maintenance).
- Description — a brief note about what this line covers.
- Quantity and Unit Price.
Add any internal Notes.
Click Save Bill. The bill is saved as a Draft.

Draft bills are not yet in your AP ledger. They do not affect your reported AP balance until you mark them as Open. This gives you time to review and verify a bill before it becomes an official obligation.

Bill Statuses

Bills move through the following statuses as they are processed and paid.

Status	What it means
Draft	The bill has been entered but not yet verified or posted. It is not in the AP ledger and does not affect your reported AP balance. Can be edited freely.
Open	The bill has been verified, posted to the AP ledger, and the balance is officially owed to the vendor. Appears in your AP balance and aging reports.
Partially Paid	At least one payment has been recorded against the bill but the full balance has not been settled.
Paid	The full bill amount has been paid. The balance is zero and the bill is closed.
Voided	The bill was cancelled before payment. Voided bills are kept for record-keeping but do not affect your AP balance.

Marking a Bill as Open

When you have verified that a bill is accurate — it matches the goods you received and the prices you agreed on — you mark it as Open to post it to your AP ledger.

Open the Draft bill from Accounting › Bills.
Review all line items, the vendor reference number, the bill date, and the due date.
Click Mark as Open.
The bill status changes to Open and the balance is now included in your total AP balance.

From an accounting perspective, marking a bill as Open records the following entries:

Debits the expense account(s) specified on the bill lines (e.g., Cost of Goods Sold)
Credits Accounts Payable for the total amount owed

Once a bill is marked as Open, its line items are locked for editing. If you discover an error after marking Open, contact your bookkeeper before making any adjustments. Incorrect changes can affect your financial statements.

Recording a Payment

When you pay a vendor — whether in full or as a partial payment — you record the payment against the open bill. The system supports multiple partial payments on a single bill.

Open the Open or Partially Paid bill from Accounting › Bills.
Click Record Payment.
Enter the payment details:
- Amount — how much you are paying now. Can be less than the full balance for partial payments.
- Payment Method — Check, ACH / Bank Transfer, Credit Card, Cash, or Wire Transfer.
- Payment Date — the date the payment was made or will be made.
- Reference Number — check number, wire confirmation, or ACH batch ID. Always fill this in for non-cash payments to simplify reconciliation.
- Notes — any additional information about this payment.
Click Save Payment.

The bill status updates automatically to Partially Paid if a balance remains, or Paid if the full amount has been settled. From an accounting perspective, paying a bill debits Accounts Payable and credits your bank or cash account for the amount paid.

AI Receipt Scanning

Instead of manually entering a vendor bill, you can upload a photo or PDF of the vendor's paper invoice and let AI extract the details automatically.

Go to Accounting › Bills and click Scan Receipt.
Upload a photo (JPG/PNG) or a PDF of the vendor's invoice.
The AI reads the document and pre-fills the vendor, bill date, line items, and amounts into a new draft bill.
Review the extracted data — correct any fields that were misread — and save the bill.

The uploaded file is automatically attached to the bill so you always have the original document on record.

AI extraction accuracy depends on image quality. For best results, use a well-lit photo with the full invoice visible and no obstructions. Always review the extracted values before saving.

Smart Account Categorization

When entering line items on a bill, the system can suggest the correct expense account for each line based on the description. After you type or paste a line description and move to the next field, AI analyzes the text and suggests the most likely account (e.g., "powder coating materials" → Cost of Goods Sold).

You can accept the suggestion or override it with any account from your chart of accounts. Suggestions are non-binding and do not change anything until you save the bill.

Recurring Bill Detection

The Detect Recurring Bills tool is accessible from the Bills list via the button in the top-left of the page, or directly at /Bills/RecurringDetection. Click "Detect Recurring Bills" and Claude analyzes the last 12 months of your bill history to find vendors you pay on a regular schedule.

Each detected pattern is shown as a card with:

Vendor name and detected frequency (monthly, quarterly, biannual, annual).
Typical amount — the usual charge from that vendor.
Next expected date — Claude's estimate of when the next bill is likely to arrive.
Confidence badge — High (4+ consistent occurrences), Medium (2–3 occurrences or variable timing), Low (weak pattern, worth monitoring).
Suggested action — for example, "Set a monthly reminder for this bill."

This is useful for cash flow planning — knowing that a $1,200 electricity bill arrives on the 15th every month, or that your insurance renews every January, lets you reserve funds in advance and avoid surprises. High-confidence patterns are reliable enough to act on; Low-confidence patterns are worth keeping an eye on but should not be treated as certain.

Recurring bill detection requires at least 2 occurrences of a vendor bill at a similar interval to detect a pattern. Shops with less than 2 months of history will see few or no results. The scan covers bills only — direct expenses are not included.

Expense Accounts

Each line item on a bill must be assigned to an expense account — an accounting category that determines where the cost appears in your financial reports. Common expense accounts used in a powder coating shop include:

Cost of Goods Sold (COGS) — raw materials, powder coatings, and consumables that go directly into jobs.
Shop Supplies — items used in the shop that are not directly tied to a specific job (masking tape, gloves, cleaning solvents).
Equipment Maintenance — service, repairs, and parts for your oven, sandblaster, and coating booths.
Utilities — gas, electricity, and water bills that power the shop.
Rent / Occupancy — monthly rent or lease payments for your shop premises.
Operating Expenses — general overhead that does not fit another specific category.

The vendor's default expense account is set on the vendor record and pre-fills each new bill line automatically. For example, if your powder supplier is linked to COGS, every bill line from that vendor starts with COGS selected. You can override the account on any individual line item as needed.

Expense accounts are defined in Settings › Chart of Accounts. If you are unsure which account to use for a particular cost, ask your accountant or bookkeeper before posting the bill. Using the wrong account affects your Profit & Loss report and can complicate your year-end. See the Settings help page for information on managing your chart of accounts.