The first time you start to write a paper in Google Docs, and want to add a citation, click the Paperpile menu at the top. You will be prompted to allow Paperpile to integrate itself with Google Docs. Once you do this, you can add and edit citations, select a specific citation style, and add a bibliography. The "Format Citations" option is what will update your most recently added in-text citations to your selected citation style and add them to a bibliography at the end of your paper.

To format your citations and add the bibliography, click "Format Citations" in the Paperpile drop-down menu. Unformatted citations will appear as blue links in your text. Once they are formatted, they will be in the correct citation format and will have been added to your bibliography.