job costing

How Do I Enable Automatically Invoicing Customers For Reimbursable Expenses?

Chief Mechanic · September 1, 2010 ·

The first step to automatically invoice customers or clients for reimbursable expenses is to set a QuickBooks preference.

For more information on handling reimbursable expenses, see our related articles on what distinguishes a reimbursable expense from other expenses, invoicing a customer for reimbursable expenses, removing expenses from the list of billable expenses to be invoiced to a customer, and finding out which reimbursable expenses haven’t been billed to a customer.

Click on the Edit->Preferences menu selection to open the Preferences window. On the Company tab, click on the Time & Expenses sub menu. Be sure that under the Invoicing options block, the preference to Create invoices from a list of time and expenses is checked. This preference must be set before entering vendor bills for which you plan to seek reimbursement from a customer or client by issuing an invoice.

QuickBooks Premier 2009 Preferences Time & Expenses Invoicing

If you select the preference Track reimbursed expenses as income, then the income – but not the markup – associated with billing a customer for each reimbursable expense can be sent to a specific income account as discussed below.

If you don’t specify an income account for each expense account, the income associated with invoicing a customer for a reimbursed expense will be sent to the expense account itself. The Default Markup Percentage is the percentage that the reimbursed expenses will be marked up. If your markup is a positive percentage – that is, you’re charging your customer more than the actual expense to account for administrative or handling charges – the markup is sent to the Default Markup Account. The amount charged to a customer excluding the markup is either sent to an income account you specify or to the expense account.

If you specify a positive Default Markup Percentage, QuickBooks will automatically create a new Item in your Item List – a Group named Reimb Group. With a positive markup, QuickBooks will automatically subtotal reimbursable expenses on an invoice and display the markup and the total of the markup and the reimbursable expenses themselves.

For each General Ledger Expense account that you’d like to match to a corresponding Income account, edit the General Ledger account by clicking on the Company->Chart of Accounts menu selection or using the keyboard shortcut Ctrl + A. Select the Expense account you’d like to match to an Income account and edit the account by clicking on the Account button at the bottom of the Chart of Accounts window or using the keyboard shortcut Ctrl + E. Click the checkbox for the Track reimbursed expenses in Income Acct. setting and specify the Income account in the pulldown list.

QuickBooks Premier 2009 GL Add Account Track Reimbursed

You must assign a different Income account to each Expense account. Otherwise, you’ll receive this warning:

QuickBooks Premier 2009 General Ledger Warning 7

Enabling the preference and setting the relationships between income and expense accounts for reimbursable expenses is just the first step in automatically invoicing customers or clients for these types of expenses. Other steps include marking expenses as reimbursable, finding uninvoiced reimbursable expenses, and removing an expense from the list of those to be billed to a customer.

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How Can I Find Out Which Reimbursable Expenses I Haven’t Billed To a Customer or Client?

Chief Mechanic · September 1, 2010 ·

To find out which reimbursable expenses you haven’t billed to a customer or client, click on the Reports->Jobs, Time & Mileage->Unbilled Costs by Job menu selection to produce the Unbilled Costs by Job report.

For more information on handling reimbursable expenses, see our related articles on enabling automatically invoicing customers for reimbursable expenses, what distinguishes a reimbursable expense from other expenses, invoicing a customer for reimbursable expenses, and removing expenses from the list of billable expenses to be invoiced to a customer.

Here’s a sample of the output:

QuickBooks Premier 2009 Report Unbilled Costs By Job

If that report is not available in your edition of QuickBooks, you can create the same report by clicking on the Reports->Custom Transaction Detail Report menu selection and changing the parameters for this report.

Here’s how to modify a Custom Transaction Detail Report to be identical to the Unbilled Costs by Job report:

Starting on the Display tab, change the Report Date Range to All
In the Columns block, deselect these columns: Num, Name, Class, Clr, Split, Debit, and Credit
In the Columns block, select these columns: Source Name, Billing Status, and Amount
In the Total by pulldown list, locate and select Customer
Click on the Filters tab and in the Choose Filter scrolling list, locate and click on Billing status
Click on Unbilled as the Billing Status
In the Choose Filter scrolling list, locate Detail Level and click on All except summary
In the Choose Filter scrolling list, locate Account and select all the accounts shown except accounts of these types: Accounts Receivable, Accounts Payable, and Income
Click on the Header/Footer tab and in the Report Title field, change the title of the report to Unbilled Costs by Job
Click Ok to produce the report

Here are the tabs you’ll need to modify. The Display tab:

QuickBooks Premier 2009 Report Custom Transaction Detail Display Tab

The Filters tab (after applying 1 of 3 filters described):

QuickBooks Premier 2009 Report Custom Transaction Detail Filters Tab

The Header/Footer tab:

QuickBooks Premier 2009 Report Custom Transaction Detail Header/Footer Tab

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How Do I Remove Some Expenses From the List of Billable Expenses To Be Invoiced To a Customer or Client?

Chief Mechanic · September 1, 2010 ·

Sometimes, after recording an expense as billable to a customer or client (in other words, it’s a reimbursable expense), you need to change it to an expense for which you won’t seek reimbursement. More technically, this is called resetting the billable status flag.

For more information on handling reimbursable expenses, see our related articles on enabling automatically invoicing customers for reimbursable expenses, what distinguishes a reimbursable expense from other expenses, how to invoice a customer for reimbursable expenses, and finding out which reimbursable expenses haven’t been billed to a customer.

There are 2 basic methods to accomplish this:

Re-visit the transaction screen where you first recorded the expense and remove the checkmark from the Billable? field
Use the Hide field to change the billable status of the expense

If you’ve already created a reimbursable expense, you’re familiar with this process, so we’ll omit the discussion of the first method because it involves simply reversing what you previously did.

For the second method, click on the Customers->Invoice for Time & Expenses menu selection. Select the Customer:Job to whom the reimbursable expense was first assigned. Be sure to check the setting Let me select specific billables for this Customer:Job so that you can change the billable status on individual expenses. Then, click the Create Invoice button.

QuickBooks Premier 2009 Invoice for Time & Expenses

The Create Invoices window will open along with the Choose Billable Time and Costs window. In this latter window, select the tab that contains the expense you do not want to bill to the customer. Next, select the individual expenses whose billable status you’d like to change and place a checkmark in the Hide column for each such expense. Click Ok to close the Choose Billable Time and Costs window.

QuickBooks Premier 2009 Choose Billable Expenses

You can change the billable status of some expenses at the same time you are invoicing for others. If you were simply changing the billable status and not invoicing for any expenses, you can close the Create Invoices window without saving your work. Otherwise, process the invoice as you normally would.

Changing the billable status of an expense does not remove the expense from your accounting records. The expense will continue to be associated with the specified Customer:Job for job profitability analysis. It simply will no longer be flagged as an expense that is waiting to be billed to a customer or client.

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What Distinguishes a Reimbursable Expense From Other Expenses?

Chief Mechanic · September 1, 2010 ·

A reimbursable expense is an expense that you expect to invoice to a customer or client either at the actual cost or with a markup. QuickBooks includes features to distinguish reimbursable expenses from other types of expenses and to track which reimbursable expenses have in fact been invoiced to a customer.

For more information on handling reimbursable expenses, see our related articles on enabling automatically invoicing customers for reimbursable expenses, invoicing a customer for reimbursable expenses, removing expenses from the list of billable expenses to be invoiced to a customer, and finding out which reimbursable expenses haven’t been billed to a customer.

In QuickBooks, the 4 principal ways to record expenses for a business are:

Recording a vendor bill using the Vendor->Enter Bills menu selection
Writing a check using the Banking->Write Checks menu selection or Ctrl + W keyboard shortcut
Recording a credit card transaction using the Banking->Enter Credit Card Charges menu selection
Via a General Journal entry using the Company->Make General Journal Entries… menu selection

When you record an expense using 1 of these 4 methods, you can associate line items on the transaction with one or more Customer:Jobs. Doing so will enable you to analyze both the expenses as well as the revenues from a job.

When you add a Customer:Job to a line item on a check, vendor bill, credit card charge, or General Journal entry, QuickBooks will automatically put a check mark in the Billable? field. That check mark in the Billable? field indicates this is a reimbursable expense to be invoiced to a customer or client. If it’s not, simply remove the check mark by clicking on it.

Unfortunately, there’s presently no way to set the default for the Billable? field to being unchecked for those organizations who want to simply assign expenses to customers and not seek reimbursement. Leaving this field checked won’t interfere with associating expenses with customers; it’s an important detail if your organization does want to use it to track reimbursable expenses. In either case, with a Customer:Job associated with the line item for the expense, you’ll be able to use QuickBooks to perform job profitability analysis, more commonly known as job costing.

The screens for each of the 4 principal ways to record an expense are shown below. Here’s the Enter Bills window:

QuickBooks Premier 2009 Enter Bill Reimbursable Expense Tab

The Write Checks window:

QuickBooks Premier 2009 Write Checks Billable

The Enter Credit Card Charges window:

QuickBooks Premier 2009 Enter Credit Card Charge Billable

And the Make General Journal Entries window:

QuickBooks Premier 2009 Make General Journal Entries Billable

Note that the field where you enter the Customer:Job on the Make General Journal Entries window is actually called Name because General Journal entries can be recorded for an entity that isn’t a Customer:Job, such as a Vendor, Employee, or Other Name.

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job costing

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