Need help with billing in QuickBooks Online (QBO)? Whether you’ve worked with a customer and spent some money on their project, you need to pay an employee who has provided a client with hours of service, or you’re just waiting to be paid for your time and effort, it’s important that you bill clients for those expenses so that you can keep the cash flowing in your small business.
Luckily, QuickBooks makes it easy! Here’s an inside look at how billing customers for time and expenses works in QuickBooks Online:
Tracking Billable Time in QuickBooks Online
It’s easy to create a billable time activity within QuickBooks Online. Click +New, then Single time activity. Fill in the blanks and select items from drop-down lists until you’ve completed a form. The critical section of this screen is pictured below:
In this example, the employee will receive $50/hour for the work done (Cost rate). Because the Service being provided will be billed back to the customer, you click in the box in front of Billable to create a checkmark. You’re charging the customer $65/hour (a $15/hour markup), so you enter that number in the Billable field. You don’t have to worry about remembering that. QuickBooks Online, as it does with all of your other company information, retains that and makes it available to you.
Tracking Expenses in QuickBooks Online
You probably already know how to record expenses in QuickBooks Online. You can either click the +New button and then Expense, or you can click the Expenses link in the toolbar and the New transaction | Expense. Just as you did in recording time activities, you complete the fields and place a checkmark in the Billable column and select the Customer/Project from the drop-down list.
Once you’ve saved a billable expense, it will appear in the table on the Expense Transactions page. To display is again, click View/Edit at the end of the corresponding row. The transaction will open, and you’ll notice that there’s a small View link in the Billable column. Click it, and you’ll see this:
In this example, there’s been no markup applied to the transaction. If you want to add markup costs to all billable expenses, click the gear icon in the upper right and go to Account and settings | Expenses. Click the pencil icon to the far right of the Bills and expenses block of options. Click the box in front of Markup with a default rate of to create a checkmark and enter a percentage. All of your billable expenses will now include a markup of that percentage.
Invoicing Time and Expenses in QuickBooks Online
The next time you invoice a customer who has outstanding time and expenses, QuickBooks Online will remind you that they’re pending. Open an invoice form and select a customer who you know has billables. The right vertical pane will contain a box containing information like this:
Click Open if you want to see the original expense record. Clicking Add will, of course, include that transaction on the invoice.
QuickBooks Online offers another way to see your pending billables. Click the Reports link in the toolbar and scroll down to the Who owes you section. You’ll see two related reports here: Unbilled charges and Unbilled time.
Tracking Employee for Billable Expenses
If you need to track employee time for billable expenses, check out QuickBooks Time (previously Tsheets). Email me at firstname.lastname@example.org for more information and pricing or click here for a FREE trial.