Use imported receipts to create expenses against vendor and apply to customer invoice

Hi there, audreybrw.

You can use the billable expense feature in QuickBooks Online to achieve your goal. It's use to incur on your customer’s behalf when you perform a work for them.

The first thing you need to do is turn on this feature. Here's how:

1. Go to Settings ⚙, then select Account and settings.
2. Proceed to the Expenses tab.
3. From the Bills and expenses section, click Edit ✎.
4. Turn on the following:
   • Show Items table on expense and purchase forms
   • Track expenses and items by customer.
   • Make expenses and items billable.
5. (Optional) Set up the following:
   • Markup rate
   • Billable expense tracking
   • Sales tax charge
6. Bill payment terms.
7. Click Save.

Once done, create an expense to bill a customer.

1. Click + New.
2. Select the transaction (Bill, Expense, or Check) you want to create.
3. Choose a payee.
4. From the Category column, select the expense account for transaction.
5. Enter the description and amount of the expense, then mark the Billable box.
6. From the Customer column, select the customer you want to bill for this expense.
7. (Optional) Enter or make sure the markup % is correct, then select the Tax checkbox or choose a tax agency if you want to charge tax.
8. Click Save and close.

Now you can add billable expenses to invoices by linking these two transactions.

1. Click + New, then Invoice.
2. From the Customer ▼ drop-down menu, select the customer you created a billable expense for. This opens the Add to invoice window.
3. Click Add on the billable expense you want to charge to your customer.
4. Click Save and close.

To add a fee to the invoice, you can browse this article as a guide: Learn how to include a service fee for products or services you sell to customers.

When it's time to pay bills or record invoice payments, you can browse these articles for the steps.

• Record invoice payments in QuickBooks Online
• Learn how to track bills and record the payments.

Get back to me if you have additional questions about the steps above. Just leave a comment below and I'll get back to you.

I just tried making this change, and I only have 'Show tag on expense and purchase forms' and 'Bill payment terms' as options on the Bills and Expenses tab.  I have the Quickbooks Online Essentials subscription.

Thanks for getting back to us, @audreybrw.

Let me clarify things and help you with your concern about entering billable expenses.

The billable expense feature is only available in QBO Plus and Advanced versions. Thus, the option isn't available in your current subscription right now. If you want to utilize this feature, I suggest upgrading your subscription.

If you don't want to, you can manually create the transactions (expense and invoice) and use the Memo (Expense form) and Message on invoice (Invoice form) fields to indicate that it's an expense you've incurred on your customer's behalf.

You may also want to view the status of your sales transactions in QuickBooks. You can go to the Sales menu and select All Sales.

Come back to this post and let us know if you need further information about billable expenses, @audreybrw. The Community and I are always here to help you.

If it's not an available option on the Essentials package, then why do we even see the option to do it? 

Hi there, @JMPreve. 

Let me provide additional clarification about the billable expense feature in QuickBooks Online. 

As mentioned by my colleague above, the feature is only available in QBO Plus and Advanced. Since you see this option, I recommend confirming your subscription. 

Here's how: 

1. Sign in to QuickBooks Online as a primary admin.
2. Select Settings ⚙, then Account and settings.
3. Select Billing & subscription.

For other related articles, you can use in the future, refer to this helpful link: Income and expenses for QuickBooks Online.

Don't hesitate to add a comment below if you have additional questions about billable expenses. I'm here to help. Always take care!