If you're new to property management accounting, it can be confusing to know when to use an invoice, a bill, or an expense. While they all involve money moving in or out of a property, they each serve a different purpose in Propra.
A simple way to remember it is:
Invoices = Money coming into an entity (your business or a property)
Bills = Money owed and will be paid later
Expenses = Money that has already been paid
Let's look at each one in more detail.
Invoices
An invoice is a request for payment. In Propra, invoices are typically created when the property needs to collect money from a tenant, owner, or another party. They can also be used in administrative accounting when your company needs to collect charges such as management fees.
Invoices typically use a two general ledger accounts: Accounts Receivable and a Revenue account. This represents that you are expecting to receive money earned by the property or business. Sometimes a Liability account can be used, such as a security deposit liability or GST/HST liability account.
Common examples:
Rent charges
Utility charges billed back to a tenant
Move-in fees
Late fees
Owner charges
When an invoice is created:
It creates an amount owing by the payee (individual responsible for the payment)
The invoice appears in receivables and on the tenant or owner ledger
The balance remains unpaid until a payment or deposit is applied
The revenue is recorded for the property or business
Example
You charge a tenant $1,500.00 for rent on July 1.
Create an invoice for $1,500.00
The tenant now owes $1,500.00 and the property has recorded rent revenue of $1,500.00
Once payment is received, you apply the deposit to the outstanding invoice for that tenant (payee) and the balance owing becomes $0.00
Bills
A bill is money that is owed to someone else. Bills are used when a vendor, supplier, or contractor sends you an invoice and you plan to pay it at a later date.
Invoices typically use a two general ledger accounts: Accounts Payable and an Expense account. This represents that you are expecting to pay money for an expense incurred by the property or business. Sometimes a Liability account can be used, such as a security deposit liability or GST/HST liability account.
Common examples:
Landscaping services
Plumbing repairs
Snow removal
Utility bills
Property maintenance work
When a bill is created:
It records the amount owing to the payee (individual expecting payment)
It appears in Accounts Payable and on the payee's ledger
The bill remains outstanding until payment is made
The expense is recorded for the property or business
Example
A plumber sends you an invoice for $350.00
Create a bill for $350.00
The vendor is now owed $350.00 and the property has recorded an expense for $350.00
When you pay the plumber, record the payment against the outstanding bill and the balance becomes $0.00
Expenses
An expense is similar to a bill except the payment has already happened through a bank or credit card. Unlike a bill, there is no amount owing because the money has already left the bank account.
Common examples:
Debit card purchases
Credit card purchases
Bank withdrawals
Immediate vendor payments
Petty cash purchases
When an expense is created:
The payment and expense is recorded immediately
No Accounts Payable balance is created
The transaction is considered complete
Example
You stop at a hardware store and purchase supplies for $75.00 using a company debit card.
Create an expense for $75.00
The payment has already been made
There is no outstanding balance to track
Think of an expense as a purchase that has already been paid.
Where Do Deposits Fit In?
A deposit records money that has been received into a bank account. Deposits are often used to pay invoices.
Example
A tenant pays $1,500.00 for rent.
Locate the rent invoice in the Receivables page or create an invoice for the charge
Select the invoice to apply the payment the tenant made against and click Post
Record the deposit to the bank where the money was received
The invoice is now paid and the money is reflected in your bank account.
Quick Comparison
Feature | Invoice | Bill | Expense |
Money coming in? | Yes | No | No |
Money going out? | No | Yes | Yes |
Creates an amount owing? | Yes, someone owes you | Yes, you owe someone | No |
Payment already happened? | Usually no | Usually no | Yes |
Appears in Accounts Payable? | No | Yes | No |
Used for tenants and owners? | Yes | For returned security deposits and income payouts | Sometimes |
Used for suppliers? | No | Yes | Yes |
Which One Should I Use?
Ask yourself these questions:
Am I collecting money?
Use an Invoice.
Do I owe a supplier and will pay them later?
Use a Bill.
Have I already paid for something?
Use an Expense.
Did money just arrive in my bank account?
Record a Deposit and apply it to any outstanding invoice if needed.
Summary
The easiest way to remember the difference is:
Invoice = Someone owes you money.
Bill = You owe someone money.
Expense = Money has already been paid.
Deposit = Money has been received.
Using the correct transaction type helps keep your property accounting accurate, your reports reliable, and your tenant, owner, and vendor balances up to date.