Invoices and Total Contract Value Question

JS1050 · ‎July 23, 2021

Question: Is there a best practice for having Total Contract Value displayed in Quickbooks?

Additional Information for Question:

Right now, our company has a process where we invoice the Job being performing all within one (1) invoice with multiple Line Items to indicate each Milestone Payment for the Job.
In the example below, we are invoicing for Milestone Payment 1 & 2 today (and will show a QTY of zero for Progress Payment 3 since it is not due until Sept.)

Problems with this approach

When the customer pays with the online Quickbooks payment for Progress Payment 1 & 2, the outstanding balance goes to zero (as expected) but unless someone comes into the invoice and manually updates Progress Payment 3 to be a QTY of 1 (instead of a QTY of zero) then there are potential missed future invoices when viewing outstanding balances, overdue invoices, etc.

End-Goal:

Is there a best practice that others are using when wanting to be able to track and see Total Contract Value while at the same time invoice with this type of process? Or would each Line Item have to be its own separate invoice (which we are trying not to do but if required we understand).

Screenshot:

MariaSoledadG · ‎July 23, 2021

Allow me to share some information on some of the best practices that you can do when invoicing in QuickBooks Online, JS1050.

In QuickBooks Online (QBO), you can use progress invoicing to split an estimate into as many invoices as you need. Instead of paying in full, you can invoice your customers for partial payments. You'll want to turn on this feature so you can use it. To do that, follow the steps below:

Click the Gear ⚙ icon and select Account and settings.
Select the Sales tab.
In the Progress Invoicing section, click Edit ✎.
Select the Create multiple partial invoices from a single estimate checkbox.
Select Save and Done.

Once done, you can now create a progress invoice template. For more information and detailed steps, refer to this article for more information: Set up and send progress invoices in QuickBooks Online.

Aside from that, you can also use projects to add project income, expenses, labor expenses, add old transactions to new projects and run project-specific reports. To know more about this, read this article for additional reference: Set up and create projects in QuickBooks Online.

However, if none of the two works for you, you may want to use a third-party application to make sure that you'll be able to get the information you need and your end goal. Also, for your reference, you can run reports so you'll know where your business stands. Check this article so you'll be guided: Run Reports In QuickBooks Online.

Fill me in if you have any questions about invoices. We'll always be here to further assist you.

View solution in original post

MariaSoledadG · ‎July 23, 2021

Allow me to share some information on some of the best practices that you can do when invoicing in QuickBooks Online, JS1050.

In QuickBooks Online (QBO), you can use progress invoicing to split an estimate into as many invoices as you need. Instead of paying in full, you can invoice your customers for partial payments. You'll want to turn on this feature so you can use it. To do that, follow the steps below:

Click the Gear ⚙ icon and select Account and settings.
Select the Sales tab.
In the Progress Invoicing section, click Edit ✎.
Select the Create multiple partial invoices from a single estimate checkbox.
Select Save and Done.

Once done, you can now create a progress invoice template. For more information and detailed steps, refer to this article for more information: Set up and send progress invoices in QuickBooks Online.

Aside from that, you can also use projects to add project income, expenses, labor expenses, add old transactions to new projects and run project-specific reports. To know more about this, read this article for additional reference: Set up and create projects in QuickBooks Online.

However, if none of the two works for you, you may want to use a third-party application to make sure that you'll be able to get the information you need and your end goal. Also, for your reference, you can run reports so you'll know where your business stands. Check this article so you'll be guided: Run Reports In QuickBooks Online.

Fill me in if you have any questions about invoices. We'll always be here to further assist you.

BlackWidos · ‎October 28, 2023

The question posed regarding "Total Contract Value" also applies to QB Enterprise Desktop. The required process is:

1. We provide the Customer and Estimate.

2. They provide a Contract, with various line items for types of work under the Contract.

3. We can only invoice to the total value or funded amount of the total value, of the contract.

4. Your method, invoicing from an 'estimate' is not a proper method. We should be albe to turn that into a 'Sales Order" from the Customer, then perform and invoice against that Sales Order. The Sales Order would at least provide a 'credit balance' for the customer, and the invoices created against that sales order would decrement the balance on account the Customer has provided to us. This factor/process prevents over-billing the Customer, since the Sales Order Balance is decremented down as we invoice.

5: HOWEVER, YOUR SYSTEM DOES NOT LET US DO THAT. it is so designed around very simple processes, that even in Enterprise Desktop, we struggle to get the right information keyed in and returned in reports. Way too much manual effort to bypass the gridlock of normal accounting.

6: And your 'process labels' need to catch up to Government Accounting Standards. No one in Industry invoices from an Estimate.

PLEASE.FIX.THIS.

BlackWidos · ‎October 28, 2023

So far, in a TEST200 set up, I have not been able to get it to work. I used exact same account labels, class labels, etc., and cannot get the 'profitability detail' to pull in the sales order amount to show open balance. Therefore, our accounting system is not compliant with DCAA/DCMA regulations for Government Contract Management.

I've been asking for:

1. Contract Value

2. Contract Funding (not always the same, sometimes Government funds 50% of total Contract Value)

3. Invoices decrementing against the Value/Funding of the Contract.

4. Detailed report showing all transactions, including modifications to the Contract for additional funding, if they did not initially provide 100% funding for the entire Contract Value.

Again, we've been using this for 14yrs, trying to find a solution.

We have to do a LOT Of manual effort to get the numbers accurately portrayed. Shouldn't be that hard for your customers.

BlackWidos · ‎October 28, 2023

I'm now going to add some layers to this issue.

1. Created Estimate.

2. Created Sales Order from Estimate. Does not show in P/L detail.

3. Created a Credit Memo. That shows in the 'customer snapshot, but there is no ledger showing transactions against the CM.

4. Created an Invoice, for an easy math amount.

5. "Pay invoice" offers use of CM value ($50k), I accept 'use credit memo for this invoice.'

6. "Job Profitability DETAIL" report, "ALL transactions," only gives me the value of the Credit Memo which is now $-43,750. Does not show the Original CM, does not show the invoice amount used to decrement an amount from the $50k CM. Just the end balance.

Basic Accounting 101: Ledger sheet: Money IN on one column, Money OUT on the other Column, Running Balance, and Ending Balance.

We should not have to go to five different screens to get the answers. This is a basic process, people.

WHAT. IS. THE.ANSWER. ???

SEND ME AN EMAIL, I DON'T COME OUT HERE OFTEN, TIME SUCK. [email address removed]

Bryan_M · ‎October 28, 2023

We hear you, @BlackWidos.

I see that this has become challenging on your end. Let me help you clear things up.

The Sales Order from Estimate doesn't show in the Profit and Loss (P&L) detail report since this will only show the exact amount summarizing the revenues, costs, and expenses incurred during a specified period.

Moreover, the credit memo will show in the ledger if you already applied it to reduce the original invoice of your customer it's either through a refund or delayed credits. You can run a pull-up customized General Ledger report to show debits and credit for each transaction.

On top of that, the Job Profitability Detail report should have shown job balances including the income and expense in detail for a specific date range.

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Learn how to find transactions in your account registers so you can review or edit them by reading this article: Find, review, and edit transactions in account registers in QuickBooks Online.

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Invoices and Total Contract Value Question