Ask Your QuickBooks Questions | Drop-In Session

My company creates an invoice to charge clients retainer fees before they do the work. Once the client pays the retainer the invoice is now closed. I have to create another invoice to log all the work and once we hit the retainer amount, I have to then minus it out. This always messes me up because then it shows invoices are open until the client hits their retainer amount. How can I start out with a negative amount invoice?

Hey @Ericap19 ,

It is so lovely of you to drop into our live session today. To assist you further, could you share which product you are using, such as QuickBooks Online, QuickBooks Desktop, etc. So we can give you the best solution! I will be looking out to your reply! Thanks in advance. 

My company is a Ca SMLLC, we invoice the client for pass thru costs like filing fees along with our regular service. So, an invoice looks like for example: 

Service $100

Filing fees $100

Postage $10

Total: $210

What is the best way to invoice these and categorize it as 2 of the line items are reimbursed income and not actual gross receipts.

We are using Quickbooks Online

Thanks for providing that information, @Ericap19. So you are allowed to enter a negative amount in QuickBooks Online, but the total or balance can not be negative. Therefore, what I recommend is creating a credit memo. That way, you can have a negative balance on the customer's account and apply this on the next invoice and so forth. Before using the credit memo, please ensure that you turn on the auto-apply feature so QuickBooks can automatically apply credit memos to the customers' balances or open invoices. Here is how to create a credit memo:

1. Select + New.
2. Click Credit memo.
3. In the Customer dropdown, choose the customer's name.
4. Enter the credit memo details, such as the date and the amount. Tip: You can create a custom credit service item to quickly add it to credit memos as a single line item.
5. When you're done, select Save and close.

From here, QuickBooks will add it to the invoice, and that's it! However, if you prefer to do this manually, you can turn off the feature and follow the linked article's instructions above to apply a credit memo to the invoice as well.

If you have any other questions, please don't hesitate to let us know. Take care!

Welcome to the Community, @Bookkeepermom. Thanks for joining our Drop-In Session. I appreciate your detailed information.

You can enter pass-through costs as billable expenses in QuickBooks Online Plus and Advanced. A billable expense is an expense you incur on a customer's behalf while performing work for them.

The first step is to set up billable expense tracking in your settings.

Here's how:

1. Use the Gear (⚙️) icon, then go to Account and settings.
2. Access your Expenses tab.
3. From the Bills and expenses section, click your Pencil (✏️) icon.
4. Turn on Show Items table on expense and purchase forms, Track expenses and items by customer, and Make expenses and items billable.
5. If necessary, set up a Markup rate, Sales tax charge, and/or Billable expense tracking.
6. Enter your Bill payment terms.
7. Select Save.
   
   

Now you can bill customers for expenses and reimburse the cost by linking your billable expenses to invoices.

I'd also recommend working with an accounting professional to confirm this is the best method for your business to handle pass-through costs. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Please don't hesitate to send a reply if there's any additional questions. Have a wonderful day!