Observed Bill and daughter (7)
I believe the answer is:
noticed
'observed' is the definition.
(noticing is a kind of observing)
'bill and daughter' is the wordplay.
'bill' becomes 'notice' ('notice' can be a synonym of 'bill').
'and' is a charade indicator (letters next to each other).
'daughter' becomes 'd'.
'notice'+'d'='NOTICED'
(Other definitions for noticed that I've seen before include "Seen" , "remarked" , "regarded" , "Spotted" , "Realised" .)