How to set up your expense settings

[0:00] QuickBooks has some great features to help you keep track of your expenses. Let's go over the options and settings that let you see your profitability from different angles, such as by project or for your business overall. We'll go over your options for tracking expenses and also turn on purchase orders. To get started, go to Settings and select Account and Settings, then Expenses.

[0:24] These are all your expense settings. Showing the Item Table on expenses is only needed if you're using QuickBooks to manage your inventory and want to mark an expense, bill, or check as an inventory purchase. Toggle on this setting to track expenses per customer or project. This is a great feature if your business works on a project basis.

[0:46] And if you do, see the video at the end to learn more about tracking your expenses and profitability by project and how to work off an estimate. This lets you measure the profitability of your customers and projects. Toggle this feature on to charge customers for expenses related to the work you're performing for them.

[1:07] If you want to charge customers a markup on expenses, check this box and enter your default markup rate. Note that you can change this later when recording the expense. By default, when customers repay you, it's tracked as income so that you can see both the reimbursement and the original expense on your statements. If you check this box, QuickBooks tracks it all with the same expense account.

[1:32] So when you spend the money, the expense account will go up, and when you're repaid, it will go back to zero so that you won't see any effect on your financial statements. Last, if you charge sales tax on billable expenses, check this box here. Note that this is pretty rare. If most of your vendors give you the same amount of time to pay bills, use this field to choose the most common Terms.

[1:56] That way, anytime you enter a new bill, QuickBooks will automatically enter the terms and save you some time. Use this toggle to turn on purchase orders. These let you send orders to your vendors. You can also customize your purchase order numbers and customize the email message you send with purchase orders. Now let's see where these settings show up.

[2:19] Select the Create button, and now you can record purchase orders. Also, there's a place on Expenses, Checks, and Bills to record which customer or project you spent money on. There's also a link to show you how to make expenses billable at the end of this video if you want more help. Now you're ready to customize your own expense settings.