Creating an Invoice to client for reimbursable expenses (QBO Essentials Version)

Welcome to the Community, ChatChamps.

I'd like to help and share how you can add billable expense to your customer invoice in QuickBooks Online.

We can turn on billable expense tracking feature. This way, you can easily record and track billable expenses  your customer can reimburse them when they receive their invoice. 

To turn on billable expense:

1. Go to Gear ⚙ icon . Then, select Account and settings.
2. Go to the Expenses tab.
3. From the Bills and expenses section, select Edit ✎.
4. Turn on the Show Items table on expense and purchase forms, Track expenses and items by customer, Make expenses and items billable features.
5. Set up the other necessary options.
6. Click Save and Done.

After that, you can now enter a billable expense.

Here's how:

1. Click the + New button.
2. Choose the transaction (Bill, Expense, or Check) you want to create.
3. Select the payee.
4. From the Category column, select the expense account for the transaction.
5. Enter the description and amount of the expense. Then, select the Billable checkbox.
6. In the Customer column, choose the customer you want to bill for this expense.
7. Fill in the other needed fields.
8. Click Save and close.

Once done, you can open this article for the steps to add the billable expense to an invoice: Enter billable expenses.

I've also added this link to learn how you can enter and manage expenses in QuickBooks Online.

Please reach us back for other questions and concerns about billable expense. I'll be here to assist. Have a good one!

Thanks for responding however this doesn't help me with the QBO Essentials version. I can't see to justify an upgrade of $400/annual for the "tracking billable expenses". The QBO Essentials doesn't have the "trackable" feature. Can you please provide a work around?

Hi, Thank you for responding. However, I do not have the option to turn on the billable expense tracking feature in the essentials version. Can you provide a work around? Unfortunately, I am not in a position financially to upgrade too Advanced or Plus that does have that feature. Thank you in advance!

Hi, Thank you for responding. However, I do not have the option to turn on the billable expense tracking feature in the essentials version. Can you provide a work around? Unfortunately, I am not in a position financially to upgrade too Advanced or Plus that does have that feature. Thank you in advance!

Hello there, @ChatChamps. I'm here to help you record a billable expense in QuickBooks Online Essentials.

Yes, the billable expenses are available in QuickBooks Online Plus and Advanced. However, allow me to share a workaround. We can create a billable expense income account and move the expense there.

Here's how:

1. Choose Chart of Accounts from the Accounting tab.
2. Select Income as the Account Type when you click New.
3. You can name it Billable Expense Income. Fill in all of the required information. 
4. Click Save and Close.

Create a journal entry to pass the expense to the billable expense revenue account once you're finished. The next step is to construct an item and associate the billable expense income with an Income account.

Here's how:

1. Select Products and Services from the Sales tab.
2. Choose New and then an item type. Fill in all of the required information.
3. Select the Billable Expense Income account from the Income account drop-down menu.
4. Save and close the window.

You can now invoice your client using the item you created after completing these steps. You could also look at this page: QuickBooks Online Income and Expenses.

Don't hesitate to reach out to me if you have additional questions about recording expenses in QuickBooks Online Essentials. I'll be right here to help. Have a great day!

I am in this same situation here and still need a little more help. Can you give an example transaction with the step by step process?  For example, I paid for gas for my vendors car.  They are going to pay me back.  So far I have added the expense from my credit card to an expense category in quickbooks.  What do I do next?  Just create an invoice to the vendor to pay me back?  Thank you for your help?

We can enter a Bank Deposit for the refund, Acct42MB. Let me give you the step-by-step process to do this.

Since you already entered an expense, you don't need to create an invoice. Instead, we can use the Bank Deposit option to record the refund from your vendor.

Here's how to do it:

1. In QuickBooks Online (QBO), click the + New button at the upper left.
2. Select Bank Deposit.
3. In the Add funds to this deposit section, enter the amount refunded by the vendor.
4. Choose the expense category that you selected on the initial expense.
5. Once done, hit Save and close.

To learn more about managing vendor credits and refunds in QBO, consider checking out this article: Enter vendor credits and refunds in QuickBooks Online. This includes a variety of steps to choose from depending on what scenario applies to you.

You can also visit our website for more tips and other resources you can use in the future: Self-help articles.

Please post again or leave a comment below if you have additional questions about this or anything else QBO. I'm always here to assist. Take care.

Thank you so much for your response!  I think I have it now.  So if I pay for something upfront as a favor for a vendor (I say that because normally this is the vendors expense, but they couldn't pay for it themselves at the time).  I will just add the expense to the appropriate category and when they pay me back, I just add it in as a deposit?  

You're on the right track now, @Acct42MB.

Just as my colleague explained above, you can enter the vendor refund as a deposit. However, please be sure to run this by your accounting professional. Your accountant can let you know the best way to record the data based on your business needs. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center. 

Please let me know if there is anything else I can help you with. Take care and have a good one! 

Great!  Thank you so much Tori!

You're certainly welcome, @Acct42MB!

It's always a pleasure to assist customers like you! Feel free to reach out at any time. See ya around!