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Billing for Time and Expenses: How It Works

7/26/2017

 
QuickBooks handles billable expenses capably, but it's critical that you understand the process thoroughly before proceeding.

 Billing for inventory parts is easy.  Pick the items from a list and specify a quantity.  Poof.  Done. Billing for costs, time or mileage is a little more complex.  QuickBooks has built-in tools to help you do this, but it's a bit of a process.
 
To simplify your workflow, do this groundwork first:
Go to Edit | Preferences | Time & Expenses | Company Preferences.  Click the Yes button under Time tracking and indicate your choices under Invoicing options.  If you plan to mark up some costs and want a default number, enter a percentage and account (these can be changed on individual invoices).
Picture
Figure 1: As you do with other QuickBooks processes, make sure that your Preferences are set correctly.

Add any billing items necessary by clicking Lists | Item List and then Item | New in the lower left corner.

If you plan to bill for mileage, go to Lists | Customer & Vendor Profile List | Vehicle
List and enter information about every business vehicle.

Invoicing for Services​

If you're a service-oriented company, you bill for time frequently.  This is easy. You're probably already familiar with the Enter Time entry in the Employees  menu.   Whether you make individual time entries or complete a timesheet, it's critical that you make the correct selections for each Customer: Job, Service Item and Payroll Item field, and check the Billable box.

When you create invoices, this box will open after you select a customer:

​You can let QuickBooks enter the time totals now, or add them later by clicking the Add Time/Costs button.  Either way, the Choose Billable Time and Costs window opens.

Add a checkmark next to each entry that should be billed, and click Options . . . to indicate whether you want one line for each time entry or would rather combine all similar service item types.
Picture
Figure 3: QuickBooks wants to know which entries should be invoiced.
​

More Complexity
​

If you're done with billable expenses for this invoice, click OK.  If there are other costs that you covered, click the Expenses tab to see all transactions that you earmarked for this client on a bill, check or credit card.   You have the option here to mark up the cost by a percentage or amount (even if you established this in Preferences), and to specify an account.

​​Do the same for Mileage, which you would have entered previously – when it was incurred -- at Company |  Enter  Vehicle  Mileage.    Then  select  any  Items  that  you  purchased  for  the customer.  Your  records should  be  correct  –  assuming  that  you  were  conscientious  about assigning expenses to customers and jobs. 
Picture
Figure 4: It's easy to pull billable expenses into invoices if they're documented carefully.
​
Turning expenses into invoices and then into income can be complicated.  Let us know if we can help. We are your partner in building a successful business.
QuickBooks Tip
Here's a cool little keyboard shortcut.   Hit F2 while you're in QuickBooks, and you'll get the Product Information screen. It'll tell you everything you want to know about your specific copy of QuickBooks, like your release and license number, the file size, number of users logged in, audit trail status and the total number of accounts, customers, employees, etc.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
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    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
        • Military
        • Real Estate
        • Retirement Savings
        • Seniors
        • State Taxes
        • Record Keeping
        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams