Expense Billing in QuickBooks®
The ability to track and bill expenses by customers is a useful function in accounting software, applicable for many industries and business sectors. Billable expenses often incur during the course of providing services, and require the business to pay the expense and subsequently bill the appropriate customer at a later time. Without an efficient method of tracking these expenses, costs of doing business may be lost for lack of a streamlined system. QuickBooks® offers unique features in the data entry process of entering transactions to mark specific expenses as billable, even providing the ability to list additional expenses and markups on a customer statement that may be provided for reimbursement.
How are Billable Expenses Entered?
QuickBooks® integrates normal expense processing – such as those entered in credit card, bill or check screens – with billable expenses by providing specific categories within these screens to further classify the transaction. If, for instance, a contractor needed to purchase additional hardware for a kitchen remodel (assuming the agreement between client and contractor included expenses incurred for the finished product), the transaction would be paid for by the contractor’s business funds. During the data entry process within the QuickBooks® file, the transaction information would be entered, to include the method of payment, date, vendor name, reference number, memo and type of expense. Additional information would be provided to consider it a billable expense: a name would be provided in the Customer:Job column of the Expense section, linking the transaction to the specific job that incurred the expense, and the ‘Billable’ box checked to pass the charge onto the customer.
Each transaction entered that is billed to a particular customer is listed in a customer register, adding to the data collected on all other receivables related to the customer. These registers may be viewed in the Customer Center screen as a snapshot of recent transactions, within an Accounts Receivable QuickReport related to a specific customer, in a listing of all accounts receivable in an A/R Aging Schedule or Detail Schedule, or in an actual register screen listing every transaction incurred for a particular customer.
Issuing Billing Statements
The expenses incurred and expected to be reimbursed can be passed to the customer through the issuance of an invoice, sales receipt, or statement charge, the last of which is most common for industries with regular expense billing functionality. After the customer and job are selected from the Customer:Job drop-down list at the top of the chosen document, time and costs (expenses) are added through the selection of an Add Time/Costs button. QuickBooks® allows for the customization of expense billing by electively choosing when and whether to pass along expenses through a billing statement, even allowing a business to hide items appearing in the Add Time/Costs window without deleting the actual transaction. Markup amounts and percentages may be added to the statement, with discretion to the preparer over the appearance of this information on the printed statement sent to the customer.