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forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

If I purchase items using a Purchase Order and note a client name, then pay the Bill for the PO and mark that item as billable to the client (side note that should be automatic in QBO to mark as Billable if a client is specified - very annoying to check that every time), then when I create the invoice that item shows up in the Add to Invoice screen on the right.  I add to invoice and it comes over with the item on one line showing Cost then on the next line it has a markup line showing markup and says client won't see this line.  The problem is if I then run a P&L report that markup line comes across as "Reimbursed Expenses" instead of Sales.  If I add the same item to the Invoice (not purchased and billed prior) then it simply shows one line with the client price (inluding markup setup in item setup) and the P&L shows it correctly as Sales and no "Reimbursed Expenses" line.  Wondering if this is how it is supposed to work or if I have something setup wrong - I have tried many of the settings under Expenses, etc. and can't get this to work the same regardless if item is from a PO or just manually added to the Invoice.  I attached two screenshots showing the difference on the invoice and how that difference comes over into the P&L.

14 Comments
RCV
QuickBooks Team
QuickBooks Team

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Great to have you here, forJO.

 

I appreciate you for providing us the in-depth details of your concern and performing some troubleshooting steps on your end. I would like to commend also for the screenshots provided that help us better isolate the issue. In QuickBooks Online (QBO), we can change the Markup income account to reflect the correct posting account when running a report. Let me show you how:

  1. Go to the Gear icon on the top menu.
  2. Choose Account and settings.
  3. Select Advance.
  4. Tick the Pencil icon on the Chart of accounts section.
  5. Go to the Markup income account field and choose an account. If you'll want to change the account for the billable expense, just go to the Billable expense income account field.
  6. Press Save.
  7. Hit Done.

If you track the billable expenses and items as income, then it will use the billable account selected in the Accounts and settings. If you'll want to change it then follow the instructions above and proceed to Step 5. Then, update the account for the billable expense in the Billable expense income account field.

 

On the other hand, QBO uses the income account of the item based on what you set up in the Product and Service item page. Once done, try running the Profit and Loss report to compare it with the markup line on your invoices. 

 

I've got articles here for more insights about Chart of Accounts:

 

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Please reply to this post and I'll get back to you. Have a great day ahead. 

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Now instead of saying "Reimbursed Expenses" on the P&L it says "Billable Expenses Income" instead of everything being under SALES.  In this screenshot you can see I bought one item for $5 and then sold that item for $10 ($5 is showing as Sales P and $5 came as Billable Expense Income) and then I also sold one just by entering on the Invoice not added from PO and Bill and it shows all $10 as Sales P (as it should be and as how everything worked in QBs Desktop before).   

 

Thank you for the help but I am not sure what the Billable Expense Income category change did for me or if I missed something in your explanation?

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Thank you for the response but I am not sure this really solved my problem or maybe I didn't follow the steps correctly.  In the screenshot you can see an example where I purchased at item for $5, then that billed amount came over on the Invoice as $5 going to SALES P and now $5 to "Billable Expense Income" instead of "Reimbursed Expenses" as before.  But then when I add the same item to the same Invoice it shows $10 in SALES P as it should and how QBs Desktop worked before regardless if the item was imported from a bill or added to the Invoice manually.  I can deal with the 2nd line being added showing the markup (it is odd since an invoice should just show the sales price setup in the Items List) but I can't deal with all those markup $s going into the wrong account in our P&L.

 

The only work around at this point that I can find is to add the markup to the item for every line on the Invoice and delete the markup line but that is a very cumbersome and time consuming process in order to invoice clients correctly and ensure they show up on the P&L as expected.

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

I forgot the screenshot 

Kristine Mae
QuickBooks Team

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

I appreciated the detailed information, ForJo. It made me understand your concern.

 

It looks like the billable expense income account was changed. If you want it to show under Reimbursed Expenses, you'll have to change the account. You can follow RCV's steps at the top. Just a reminder, though, there'll be no retroactive effect. The changes will take effect moving forward. 

 

You can also customize the Profit and Loss report so you can focus on the details that matter most to you.

 

If additional questions arise, you can always drop a comment below. We'll respond as soon as we can.

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

I don't think the problem is being understood.  If I purchase an item with a PO and in the bill mark that item billable.  Then when I add that item to the Invoice use the add function it brings over two lines one showing the item cost and one showing the markup.  The Cost line translates to SALES on the P&L (as it should) but the markup comes across as Reimbursed Expenses or Billable Expense as I was told to change it.  But then if I add the exact same item to the Invoice (not using the PO and Billing plus Add) then the item shows on one line and all of that sale goes to SALES on the P&L - as it should.  I don't want sales on an invoice to be split into two accounts.  These are items purchased with COGS and then they should sale as SALES on the P&L.  I am not getting reimbursed for expenses.  Hopefully that is clear.

Jovychris_A
QuickBooks Team

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

I appreciate the details a lot, @forJO.

 

In addition to my colleague's response, let me share some insights on how to resolve it and able to see only one account when you add the markup price.

 

First, let's make sure that you deleted the invoice payment, invoice transaction, and bill to clean the accounts used in the report.

 

Second, let's go to the Advanced settings and select the Chart of accounts section to change Markup income account and Billable expense income account to the same correct Sales account that you want.

 

Like for example, in your screenshots, the sales account you used is SALES P (Parts & Materials), then you could use this in the Markup income and Billable expense income account and view it as one sales account. Then Save it. I've added a screenshot for visual reference.

 

Then you can recreate the billable expense, invoice transaction, and payment. Then pull up the P&L report to see the changes.

 

This way, you won't have to change it and see it in the Profit and Loss report on one account. Currently, the markup rates will appear as a separate item on the invoices when using the billable expense feature. I know how beneficial it is to see it only in one line. I'd also encourage visiting our QuickBooks blog site to see the most recent feature updates and product enhancements.

 

After customizing the reports in the P&L, you'll want to memorize and see it under the Custom reports tab in the Reports menu.

 

Feel free to place a comment if you need further assistance. I'll keep my notifications open. Stay safe and well!

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

When I had the Markup Income Account changed to "Billable expense income" I was unable to save some other invoices and had an error - I contacted support about this error (and error code) and they told me to change this back to "Reimbursed Expenses", therefore I am not sure you should be having me change this field because this error took me 2 hours yesterday to figure out.

 

Also this solution will not work - I have multiple COGS and SALES accounts in my chart of accounts to track purchase and sales of different categories of items (just 2 actually).  If I add items to the Invoice manually this works correctly and follows the Income account and Expense account specified in the Products and Services Inventory setup for every item.  What I don't understand is why these Income/Expense accounts are not followed when I purchase and item with a PO and pay with a Bill then bring that billable item into the Invoice.  Why would this be treated any differently, it is the exact same item being bought and sold - not an expense being reimbursed.

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

I looked back at the screenshots in your post and I also don't have the 5th line for "Billable Expenses Income Account" - see screenshot

Jen_D
Moderator

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

It's nice to see you here, @forJO,

 

Joining the thread to share additional information about your concern.

 

The posting account of the items shown on QuickBooks reports gets its data from the Product and Services page. Whatever the accounts are assigned for each item will determine the amounts you see on financial reports. See this:

 

 

Also, regarding your second question, you will only have the field for Billable expense income account if Billable Expense is enabled in your account. To make it active, go to the Expenses menu under Account and Settings, then click Bills and expenses. On that page, mark the box called Track billable expenses and items as income.

 

Let me know once you've tried the steps. I'll be right here if you need anything else.

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Jen_D, thanks for the help, I tried this, but if I set things like that with "Track billable expenses and items as income" then the item comes over from the bill to the Invoice when added but only at the item's cost shown on the PO and Bill and not the sales price in the Product and Services Item details.  If I change to Markup the item then I get the markup line and that tracks to Reimbursed Expenses

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Jen_D, thanks for the information.  I tried that using your screenshots and that did get rid of the markup line, but now the price on the Bill and PO comes over to the Invoice as the COGS price instead of the SALES price in the Products and Services.  Therefore if left like this all items purchased on POs and Billed then transferred to Invoices would then sell to clients for the same as cost and I would go out of business very soon.  So with this solution I still need to manually fix every line on the invoice to reflect the correct SALES price.

JessT
QuickBooks Team

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

Hi forJO,

 

Thank you for keeping us updated as you check and make changes to your settings based on the instructions given by my colleagues. However, it would be best if you can check this with our Support team. That way, they can start a screen-sharing session to understand this better. You can contact them tomorrow from 6 AM to 6 PM, PST.

  1. Go to Help (?).
  2. Select Contact Us.
  3. Enter the summary of your concern, then select Let's talk.
  4. Choose a way to connect with us:
    • Start a chat with a support expert.
    • Get a callback from the next available expert.

If you have other questions, feel free to reach back out. Have a good one!

forJO
Level 2

Items marked on bills as billable come over and have markup line that links to reimbursed expenses instead of Sales Income

JessT, I have reached out to tech support numerous times and so far no resolution on that end either.  I did have a good interaction and screen share where I feel like things are finally clear on what the issue is and hopefully if there isn't a solution it can lead to one in the future.  I am told the case has been escalated and they will call me back.  Hopefully this will help resolve this issue.

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