Whether you sell products or services, you may need to create estimates in QuickBooks Online. Here’s how it’s done.
Not every sale can be instantly invoiced, although sometimes, we can't deny that we wish they could be. You may find yourself needing to prepare an estimate for your customer who is interested in making a particular purchase but needs to know what the cost will be before making their decision. If they approve, you'll of course want to send an invoice. QuickBooks Online automates this entire process. It even helps you track the progress of your estimates by providing a special report. Here’s how it works.
Estimates are just like Invoices (Almost)
The process of creating an estimate in QuickBooks Online is almost identical to that of creating an invoice. You start by clicking the New button in the upper left and selecting Estimate.
Creating an estimate in QuickBooks Online is like creating an invoice, with a few differences.
When the form opens, you’ll notice one difference right away. Directly below the Customer field, you’ll see the word Pending next to a small down arrow. Click it to see what your options are here. You’ll be able to update its status later. Select a Customer to get started. If this is a new customer, click + Add New and enter at least the name. If you want to build a more complete profile at this point, click Details and complete the fields in the window that opens. To send a carbon copy or blind copy of the estimate to someone else, click the Cc/Bcc link.
Next to the Estimate date, there’s a field for the Expiration date. Enter that and continue on to add the products and/or services that will be included, just as you would on an invoice. If you’re generating an estimate for a new product or service, click + Add new in the drop-down list. A panel will slide out from the right that allows you to create one.
You’ll see more options for your estimate at the bottom of the page. You can add a message in the message box (or leave the default message if there is one). You can also Customize it, Make recurring, or Print or Preview it. When you’re satisfied, Save it, and send it to the customer.
You can preview your estimate to see what the customer will see before saving it.
Updating the Status
Your estimate will not be considered a transaction until you accept it. To do this, click the Sales link in the toolbar, then All Sales. Find your estimate in the list by looking in the Type column. Click the down arow next to Create invoice to see your other options there. You’ll see that you can Print or Send it or save a Copy.
Click Update status. In the window that opens, click the down arrow next to Pending. From the list that drops down, select Accepted. You can also mark it Closed or Rejected. If you choose any of the last three options, another window opens that allows you to enter the name of the individual who authorized the action and the date it was done.
Tip: Don't want to go through the manual process of having a prospect sign, scan, and email you the proposal to begin the engagement? QuickBooks Online Advanced has a helpful integration with DocuSign that allows signees to receive and sign documents with greater speed, which means you can close more sales in less time. If you'd like to upgrade your QBO subscription to QBO Advanced, reach out to Account Ability Consulting for special pricing!
Click Create invoice if your estimate was accepted. You’ll have three options here. You can invoice your customer for:
The estimate total.
A percentage of each line item.
A custom amount for each line.
When you locate your estimate on the Sales Transactions page, you’ll have several options for managing it.
After you’ve made your selection, click Create invoice to open the form with the amounts filled in based on your preference. Complete anything that’s unfinished but do not change any of the product or service line items. Save it, and your invoice is ready to go. You can always check the status of your estimates by running the Estimates by Customer report.
Creating and tracking estimates is as easy as working with invoices. You may run into difficulties, though, if you need to do anything beyond that point with estimates, such as modifying and resubmitting them. We’re here to answer any questions you might have about this. It’s important that you get your estimates and their subsequent invoices exactly right, so you don’t lose money or sales. Let us know if you want to go over these concepts.