How should I bill a customer for an expense I incurred on a job on their behalf?

Good day, Acct42MB.

We can enter a billable expense and add it to your customer's invoice. I'm here to guide you through the steps.

First, let's turn on the billable expense feature:

1. From the Gear icon, select Account and settings.
2. Go to the Expense tab.
3. Click the edit (pencil) icon on the Bills and expenses section.
4. Toggle the following buttons: 
   Show Items table on expense and purchase forms
   Track expenses and items by customer
   Make expenses and items billable
5. Click Save.
6. Hit Done.

Second, enter a billable expense:

1. From the + New button, select either Bill,, Expense, or Check.
2. Enter a payee's name.
3. In the Category column, select the expense account for transaction.
4. Enter the description and amount of the expense, then select the Billable checkbox.
5. In the Customer column, select the customer you want to bill for this expense.
6. Select Save and close.

Lastly, you can link the billable expense to the invoice. Here's an article for the detailed steps: Add billable expenses to invoices.

You can also check this reference if you need additional resource in managing expenses: Enter and manage expenses in QuickBooks Online.

I'm just a post-away if you need help with entering transactions.

Hi Adrian

Thank you so much for your response.  I probably should have mentioned that my subscription does not allow for a billable expense. I only have quickbooks essentials right now.  I may consider upgrading.  Do you know of any other way I could do this without the billable expense feature?

Hi there, @Acct42MB. I'm happy to share with you the steps for creating a billable expense in QuickBooks Online (QBO) Essentials.

Thanks for posting back here and for providing additional details of your concern. To help you with this, you can set up a billable expense income account and transfer the expense to it. Then, create a journal entry to move the expense to that account. Follow along below to get this done right away.

Create a billable expense income account:

1. Navigate to the Gear icon and click Chart of Accounts.
2. Next, select New and choose Income as the Account Type.
3. In the Name field, enter Billable Expense Income.
4. Input the details needed and click Save and Close.

After that, let's now create a journal entry to pass the expense to the billable expense income account. Then, add an item and select the Billable Expense Income as the Income account. Here's how:

1. Go to the Sales tab and click on Products and Services.
2. Next, select New and choose an item type (you can select any of the item types). Input all the needed details.
3. Then, on the Income account drop-down, choose Billable Expense Income. 
4. When done, select Save and close.

I also recommend, reaching out to your accountant for guidance in performing the steps. This is to ensure you'll be able to account for the transactions correctly. When finished, invoice your customer using the item you've created. 

Then, you can run a report to track the transactions created for your customer. To do so, just go to the Reports menu and search Transaction List by Customer in the search field. 

If you have any other concerns about the billable expense feature, please don't hesitate to post again here. Have a good one.

Hi Divina!

Thank you so much for your response!!  Appreciate it!

Hi Acct42MB!

I'm glad my colleague was able to help you out. If you need anything else with QuickBooks, just let us know here in the Community. Take care and good evening!

Sorry, I'm still not sure I have it right.  I have the billable expense income account that I created in chart of accounts.  I also have the product and services line item and have chosen billable expense income for the income account.  I have used that line item to invoice the customer to get the funds back.  

I'm confused on that part where I would create a journal entry to pass the expense to the billable expense income account. 

Also, should the category on the expense itself be billable expense income or should that have an expense category?  

Thanks again!