Set up items for tracking costs and revenue in QuickBooks Desktop for Mac

Learn how to set up a service, non inventory part, and other charge item to track income or expense for those items.

These can be expenses when you pay for them or income when you sell them.  This helps track profitability of your items.  You can create reports and compare income and expense for each item. 

Set up items for tracking costs and revenues

1. Go to Lists then Items.
2. Add or edit an item.
   • To edit an item, double click the item to bring up the Edit window.
   • To add a new item, select the + icon then select New Item.
3.  Select the checkbox to specify the item is purchased and sold.
   • For a Service, select “This service is performed by a subcontractor.”
   • For a Non-inventory Part, select “This item is purchased for and sold to a specific customer:job.”
   • For Other Charge, select “This is a reimbursable charge.”
4. Select an expense account  and an income account to track sales of the same item.
5. Enter your rate or amount for the item. 
   • If you’ve set a standard markup percentage, select QuickBooks,  Settings and then select Sales & Invoicing. Enter a number for Default Markup Percentage. QuickBooks uses it to calculate the sales price when you enter the cost. Type in a different amount if you want to set a different sales price for the item.
   • If your costs vary, leave either or both prices as 0.00.
6. (Optional) Enter a preferred vendor.
7. Select OK. 

Assign costs or time to a job 

Here’s how to charge your customer for the actual time and costs for a job.

Track billable time

Use a weekly timesheet or a single activity entry to record the hours spent on the job, Be sure to mark each entry as “billable” and assign the hours to the customer. If you track by job, assign the hours to the job.

Job related purchases

Use a bill, check or credit card charge to record the purchase. On the Items tab, enter each item or service you purchased. In the Customer:Job column, assign each item or service to the customer. If you track by job, assign the item to the job. 

Other expenses

Use a bill, check or credit card charge to record expenses. On the Expenses tab, enter each expense. In the Customer:Job column, assign each expense to the customer. If you track by job, assign the expense to the job.

Pay subcontractors 

Learn how to pay your subcontractors in QuickBooks Desktop for Mac.

You can pay subcontractors by a check or you can enter a bill and pay later Here’s how to do it.

Write a check

1. Go to Banking and select Write Checks.
2. In the Pay to the Order of field, enter the name of the subcontractor then enter the date.
3. Select the Items tab.
4. In the Item column, enter the service item for the subcontracted work.
5. In the Cost column, check the amount QuickBooks filled in. Change it if it’s incorrect.
6. In the Qty column, enter the right quantity.
7. In the Customer Job column, enter the name of the job (or customer) for which the work was done.
8. Select Save.

Enter a bill

1. Go to Vendors and select Enter Bills.
2. In the Vendor field, enter the name of the subcontractor then enter the date.
3. Select the Items tab.
4. In the Item column, enter the service item for the subcontracted work.
5. In the Cost column, check the amount QuickBooks filled in. Change it if it’s incorrect..
6. In the Qty column, enter the right quantity.
7. In the Customer:Job column, enter the name of the job (or customer) for which the work was done.

Important: When you enter the customer or job name in the Customer:Job column, you can invoice the customer later for the work. You'll also be able to create reports that show your costs and revenue.

Track services performed by an owner or partner

Since owners and partners don’t submit bills, the services they perform won’t be part of the job costs. You’ll want to enter a transaction to track the work. To add owner or partner time to job costs on reports, here's what to do.

Track services performed by owner or partner

1. Set up the owner or partner. Go to Lists then Other Names list. 
2. From Lists, go to Items. Create a new service item to represent the work done by the owner or partner: 
   1. Select the This service is performed by a subcontractor checkbox.
   2. In the Expense Account field, enter the person's equity account.
3. To make the work of an owner or partner billable, enter their time on a weekly timesheet or single activity record:
   1. Enter the name of the service item you set up to represent the owner's or partner's work.
   2. Enter the name of the customer or job, if you’re tracking individual jobs for the customer.
   3. Make the time billable.
4. To invoice a customer for the owner's or partner's work, select Time/Costs when creating the invoice. In the Choose Billable Time and Costs window, select the Time tab. Then select the work you want to appear on the invoice.
5. To make owner and partner time part of the job costs on reports but not affect the profit and loss statement, write a zero-amount check as follows:
   1. Write the check in your regular checking account or in a special checking account that has no money in it. Set up the special checking account to handle checks like these.
   2. In the Pay to the Order of field, enter the name of the owner or partner.
   3. Be sure the Print later button isn’t selected.
   4. Leave the No. field blank.
   5. On the Items tab, enter each service item for the work performed. On each line, enter the number of hours in the Qty field and the job in the Customer Job field.
   6. On the Expenses tab, enter the person's equity account in the Account field. In the Amount field, enter the negative of the total amount on the Items tab. Don’t enter a job name.

Track items ordered for a specific job 

1. Create a non-inventory part item to represent each item you ordered.
   When setting up each item, select the This item is purchased for and sold to a specific customer:job checkbox. This lets you enter different rates for your cost and the sales price for your customer.
2. When you receive a bill for the items, enter each non-inventory part item in the detail area of the bill:
   1. In the Enter Bills window, select the Items tab.
   2. Enter the name of each item in the Item column.
   3. For each item, fill in the name of the customer or job in the Customer:Job column. This associates the customer with the cost of the item so you can invoice the customer later.
3. When you invoice your customer, select Time/Costs to enter the cost of the items on the invoice:
   1. In the Create Invoices window, select Time/Costs.
   2. In the Choose Billable Time and Costs window, select the Items tab.
   3. In the Use column, click next to each item whose cost you want to include on the invoice.
4. On the invoice, QuickBooks automatically fills in the sales price. This may be higher than the cost you entered on the bill.

Invoice the customer

Be careful not to invoice the customer twice for the same work. In the Choose Billable Time and Costs window, you'll see the cost both on the Time and Items  tab.  This is because you entered the time and made it billable andyou linked the service item with a customer job when you wrote the zero-amount check. Mark only the work shown on the Time tab. To avoid confusion, click anywhere in the Hide column to remove the service item entry from the Items tab. 

Run reports

After you record the zero-amount check, the cost on the Items tab in the Choose Billable Time and Costs window, appears on all job and item reports that show costs by job or item. The same cost doesn’t appear as an expense on a profit and loss statement because it isn’t assigned to an expense account.