What is a bill?
Definition of a bill
A bill is an invoice that one of your suppliers will give you, and which, sooner or later, you will have to pay.
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You might also hear a bill referred to as a 'purchase invoice' or a 'supplier invoice'.
You may see that you have a number of days (normally between 7 and 30) to pay the bill to your supplier. This time lag is the supplier 'giving you credit', in other words you don't have to pay the bill straight away. During the time between the date of the bill and the date you pay it, the bill increases your trade creditors total - the amount that you owe to your suppliers.
Example of a bill:
Your accountant gives you a bill for £600, dated 1st January with 30 days payment terms. You pay that bill on 1st February. The accountant has given you a month's credit.
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FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.