A bill is usually created when you receive the items or services you ordered and are required to pay the supplier (that is, you have been charged for the purchase). Recording a bill will update the appropriate accounts, including the account for tracking payables. Bills can be in open status (unpaid), closed status (paid) or debit status (negative purchase).
Bill could be created directly or changed from Order or Quote, but a bill cannot be changed back to a quote or an order.
General Route for Purchase:
Supplier > Quote > Purchase Order > Bill > Pay Bill > Adjustment / Debit Note