Step 5: Set up your Vendor accounts.
Vendors are the companies or people you buy from, the ones you pay.
Vendors are NOT items or services. Items or services that Vendors provide are coded on your Chart of Accounts.
It is important to set each Vendor up as a separate account in your Accounting Software.
A Vendor that provides a service for you, may need to give you a W9, as you may need to report their income to the IRS at year end.
Vendors, such as retail stores or restaurants do not need to be set up separately, unless they make up a large portion of the payables. An example would be a Lowes or Home Depot Store for a Construction or Lawn Service company.
Now that the Vendors are entered into the software, you will be able to see how much you spend on them. New Vendors should be added as needed, as new accounts are opened.