Question

Billable Expenses with QuickBooks Online Essentials

Forum|Forum|5 years ago
September 9, 2020
6 replies
72 views

Hello all,

I need your help recording billable expenses in QuickBooks Online Essentials. I understand that QBO Essentials does not give me the option to mark expenses as billable, but is there a workaround to this? I own a small design company and paid for a furniture order for my client. I would like to charge this expense to this client on their invoice. How do I best do this in QBO Essentials? I don't want to upgrade, so I'd appreciate any pointers or direction utilizing the Essentials platform. Thank you so much for your help!

QuickBooks Online

AlexV

Level 10

Good day, JSR2.

I'm here to assist you in recording a billable expense.

Yes, QuickBooks Online Plus and Advanced have this feature to record billable expenses. Though let me share a workaround. We can set up a billable expense income account and transfer the expense to it.

You can follow these steps:

Go to the Accounting tab and select Chart of Accounts.
Click New and choose Income as the Account Type.
You can name it as a Billable Expense Income. Enter all the details needed, hit Save and Close.

Once done, create a journal entry to pass the expense to the billable expense income account. The next thing we need to do is to create an item and assign the billable expense income as an Income account. Here's how:

From the Sales tab, click on Products and Services.
Select New and choose an item type. Enter all the details needed.
On the Income account drop-down, choose the Billable Expense Income you've created.
Click Save and close.

After all these steps, you can now invoice your client using the item you've created. You may also refer to this link: Income and expenses for QuickBooks Online.

Visit us again in the Community if you have other questions. See you around.

J

JSR2Author

One more thing, in setting up the new item, would that be a service or non-inventory? Thanks again!

J

JSR2Author

Alex V,

Thank you so much for your quick reply! Just to clarify, I first need to record the client's expense as an expense. Then, to pass the expense to the billable income account in a journal entry, I would debit billable expense income and credit the expense account (to zero out that expense)? Did I get that right?

Thank you again for all of your help!

G

Gina50

Was there ever a response to this question?

Thanks!

BettyJaneB

Level 9

I'm happy to see you here in the Community, @Gina50.

I'd like to ensure that you can record the billable expenses on your QuickBooks Online account properly.

The workaround shared by my peer AlexV is the best way to track billable expenses on the Essentials version of QBO. That said, you'll need to record the client's expense as an expense and it to the billable income account through a Journal Entry.

However, when it comes to the account that needs to be debited and credited, I'd suggest reaching out to your accountant. They'll be able to provide the best course of action for your business.

You can also look for an accountant from our site: Find an accountant or bookkeeper who loves your business as much as you do.

On the other hand, you can select any of the item type. Just make sure to choose the right income account during the set up.

Go to the Sales menu and select the Products and services tab.
Select New.
Select Non-inventory or Service.
Add a name. If you track SKUs, enter a SKU for the product.
From the Category ▼ drop-down, select the category that best describes your product or service..
In the Sales information section, enter a description. This is what your customers will see on their sales form.
Enter an amount in the Sales price/rate field.field blank and select the Income account ▼ drop-down and the account you want to use to track the sale.
If you need to track sales tax, select Taxable - standard rate from the Sales tax category ▼ drop-down.
When you're done, select Save and Close.

For more details about adding items in the system please see this link: Learn how to set up product and service items you buy and sell, but don't track as part of your inventory.

Don't hesitate to reach back out to me if you have additional questions, I'll be right here to help. Have a great day!

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