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Invoice customers for project expenses in QuickBooks Online

by Intuit Updated 4 weeks ago

Learn how to create invoices from project expenses in QuickBooks Online Plus and Advanced.

Once you set up Projects, you can invoice customers for specific project-related expenses (including timesheets). You can use these steps whether you’re charging customers for time and materials, or a fixed fee.

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Step 1: Decide how you’ll charge for projects

If you charge for time and materials, you usually invoice customers for specific project expenses and hours worked. You’ll need to make your project expenses and timesheets billable so you can add them to invoices.

If you charge for a fixed fee, you typically don't invoice for specific project expenses. Instead, you send customers an estimate for the entire project. You can convert the estimate into an invoice when the work begins.

However, there may be times when you need to charge for specific project expenses. A common example is when customers ask for extra work outside the original project plan.

Step 2: Turn on billable expenses

If you haven’t already, turn on billable expenses.

  1. Select Settings ⚙, then Account and settings.
  2. Select the Expenses tab.
  3. Go to the Bills and expenses section and select it to expand it.
  4. Turn on the Make expenses and items billable switch.
  5. Select Save, then select Done to close your settings.

You can now make any expense or timesheet in QuickBooks billable.

Step 3: Make project expenses billable

Go to Projects (Take me there), then select your project.

Tip: You can customize your menu by selecting ⚙ Menu settings, then select the tabs that you want to be readily available.

Project expenses

  1. Select Add to project, then select Expense.
  2. Add expenses to the form.
  3. Check the Billable box next to each item.
  4. Select Save and close.
  5. Select the project from the Customer/Project dropdown menu.
  6. Select Save.

Project timesheets

  1. Select + New.
  2. Select Time entry.
  3. Choose a worker.
  4. Adjust the date range if necessary and select a day.
  5. Add the duration of hours worked, or toggle Start/end times on to enter a start time and end time for that day.
  6. Select Add work details to add the project and make the timesheet billable.
    • If you want to use a custom rate for this timesheet, check Use custom rate and enter your desired amount.
  7. Select Done.
  8. Select Save and Close.

Note: If you use QuickBooks Time, your employees can track their time directly to the project you set up. Be sure you approve and export those timesheets so they appear in your project.

Step 4: Invoice your customer for billable expenses

Now that you’ve made all of your project expenses and timesheets billable, go back to the project's Overview tab.

  1. Select Add to project, then select Invoice.
  2. Select the customer you want to invoice from the Customer dropdown menu.
  3. Your billable expenses and timesheets will appear in the Add to Invoice pane. Add all the billable expenses or time you want to add to the invoice.
    Note: The billable rate is directly tied to the Product or Service item on the Timesheet. The rate will be the Sales Price. If there is no product or service item on the timesheet, the billable rate will be determined by the billing rate in the Employee profile.
  4. Complete the invoice and send it to your customer.

If you want to send individual expenses or timesheets as an invoice:

  1. Go to your project.
  2. Go to the Transactions tab.
  3. Find the billable expense or timesheet on the list.
  4. Select Create invoice from the Action column.
  5. Complete the invoice and send it to your customer.

When you follow these steps, QuickBooks automatically connects the billable expense and invoice to your project.

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