If you sell services and/or make purchases on a customer’s behalf, make sure you’re collecting every penny owed to you.
If your business bills its customers for time you spent on services provided or supplies you bought on their behalf to complete an order, your invoices will include billable time and billable expenses. QuickBooks Online has tools that can help you track these billables and ensure they get added to your invoices correctly. It also offers reports that make it fast and easy to see if any billables slipped through the cracks and haven't been charged to the customer yet. In this article, we'll explain how to do the following in QuickBooks Online:
track billable time
track billable expenses
bill your customer for time & expenses
find out which customers have outstanding billables
Let's get started. Note: For this article, we’ll be referring to the existing menu, but keep in mind: a new Navigation Menu is coming to QuickBooks Online. You may have already noticed this as you work in QuickBooks Online, but Intuit has made some improvements to its navigation menu! And while the former navigation menu will still remain accessible for a while, users should find this new arrangement more intuitive.
How to Track Billable Time
Part of a single time-entry screen in QuickBooks Online You can track time in QuickBooks Online in a couple different ways, depending on the needs of your business. The first method is by clicking +New, then Single time activity. Fill in the blanks and select items from drop-down lists until you’ve completed a form. If your time-tracking needs are more complex, we recommend looking into QuickBooks Time (formerly TSheets). QuickBooks Time allows you to pull employee data for payroll and invoicing, keep track of employee tasks and schedules, and automatically remind employees to clock in or out. It can also help regulate how, when, and where employees clock in and can help you increase billable time by 10% according to feedback from QuickBooks Time users. If QuickBooks Time is something you'd like to look into further, reach out to us for best pricing and training.
With QuickBooks Online, you can also set one rate for a service you supply to a customer and another rate for the employee who provides it. You might want to have a default markup percentage for expenses or hourly services. You can assign hours to projects in some cases, which are ultimately billed back to the customer. However you enter the time worked, you always have the option to designate the hours as billable just by checking a box or answering Yes.
Billing Expenses to Customers
To bill expenses to a customer in QuickBooks Online,click + New in the upper left corner and select Expense. Or click Bookkeeping in the old navigation menu, then click Expenses on the Transactions page, then New transaction | Expense.
You can make your Expense preferences known in this window.
You’ve probably completed an expense form before, so we won’t walk you through it. It’s like filling in any other form in QuickBooks Online. Just be sure to click the Billable box and select the correct customer to charge, You can also enter a Markup percentage. You can set a default for this and other expense settings by clicking the gear icon in the upper right and going to Account and Settings. Click the Expenses tab and then the pencil icon to the right to view and modify your options, as shown above.
Billing Your Customers
Now that you've recorded billable time and expenses in QuickBooks, it's time to invoice your customers! QuickBooks Online makes it very easy to know whether specific customers (or individual jobs you’re doing for them) need to be billed for time and expenses that you’ve assigned to them. The next time you create an invoice for such a customer, a vertical pane will slide over from the right of the screen displaying their billable items. Click Open to see the original transaction and Add to include it on the invoice. It looks like this:
QuickBooks Online displays information like this when you create an invoice for a customer who has accrued billable time and/or expenses.
How to pull a Report in QuickBooks Online for Unbilled Charges and Unbilled Time
To get a big-picture view of which customers have not yet been invoiced for billable time and expenses, you can pull a report. To do so, navigate to Reports and scroll down to the Who owes you section. There are two related reports here: Unbilled charges and Unbilled time.
We want you to bill for (and receive, of course!) every dollar you’ve earned. QuickBooks can help you more accurately track these business costs and bill your customers more easily. If you have questions about any of the topics discussed in this tutorial, reach out to us!