When you create a bill in Wave, you add products or services to it. These products and services each have an expense account associated with them, which you select when creating the product or service. The expense account is where all transactions involving the item are tracked in your reports.
The unpaid bill total is also tracked automatically as a liability in your accounts payable. Once the bill is marked as paid, your accounts payable liability is reduced by the same amount.
You can mark the bill as paid either from the bills page itself, which creates an expense transaction, or, if the transaction already exists, by categorizing it as Payment sent for a bill in Wave, then select the outstanding bill.
Although the category of the transaction will be Payment to vendor name on the transactions page, in your reports the individual expenses are recorded under the expense account set for each product and service.
Setting appropriate expense accounts ensures you’re able to track expenses separately on your reports for each of the products and services you purchase.
If you did not set the correct expense account for a product or service, or want to change it, you can do so by editing the product or service. However, this change will not reflect on your past bills. Learn how to change the expense account for the product or service on past bills in Update the expense account of a product or service on past bills.