How to enter a Bill from Client company into a project - for services he performed

Glad to see you here in the Community, don052. Let me provide details on how to tag a bill to a job name in QuickBooks Online(QBO).

Are you trying to assign a bill to a project/customer? If so, we can achieve this by using the Billable expense feature in QBO. Beforehand, please note this functionality is only available to Plus and Advanced versions. If you aren't subscribed, I recommend upgrading your QuickBooks account first to start using this feature.

Once ready, let's turn on the billable expense. Here's how:

1. Go to the Gear icon and then select Account and settings.
2. Click the Expenses tab.
3. From the Bills and expenses section, hit 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. Bill payment terms.
6. Hit Save.

Then, follow the instructions below to link a specific customer/job to a transaction:

1. Go to the + New button.
2. Open a Bill and select the payee.
3. In the Category column, select the expense account for the transaction.
4. Fill up the necessary information, then select the Billable checkbox.
5. On the Customer column, select the customer and the specific job/project you want to bill for this expense.
6. Click Save and close.

Moreover, when you add the billable bill to the invoice transaction and associate it with a project, please be aware that even if you mark the invoice as paid, the bill itself will still show as unpaid. Therefore, you must manually mark the bill as paid to properly reflect it as an expense, rather than just income, in your project records. I'll outline the steps below.

1. Go to the Projects menu and click Transactions.
2. Navigate to your open bill, then press View/Edit.
3. Hit Mark as paid, then Save or Save and close.

To learn more about billable expenses in QBO, you can utilize these articles:

• Entering billable expenses
• Invoice customers for project expenses

Additionally, you can run various vendor reports to help you review your expenses, bills, and checks to ensure they're tracked accurately. Then, personalize the data to focus on specific accounts or filters.

Please let us know in the comments if you need further assistance managing or creating bills in QBO. It's my goal to ensure your record is accurate.

Great, thanks for replying.

I have all the settings ready to make a bill - billable.

What is happening is that the Owner of the company a construction company provided a service, that he normally pays someone else. So, He has an amount in mind for this service. He did not pay anybody this time for this service and he provided the services to his customer himself.

So no money went out the door and no money is going out the door for this Bill.

He created the Bill and applied to the Project. Good, and it shows up as an expense on the Project.

So, now he invoices his customer, which includes this service.

But the PROBLEM is that the bill is still unpaid. It really isn't a bill from a third party.

and

He wants to show it as an expense on the Project.

If it was entered as a Billable expense would it be relieved when his customer pays the invoice with this billable expense? so I guess the customer is really paying the bill...

If he does that will it still be an expense on the Project?

I was thinking about getting the Ledger product to try different scenarios out...

but in this case if you say it is only avail in Plus and Advanced ... then not a good situation

and the Ledger product wouldn't have Projects either

sad, wish QB would give us an extra copy of Plus to experiment cause the Sample company is a bad situation and it erases everything I do or create a Sandbox for us to experiment...

just sayin'

Yes, don052. When your customer pays the invoice, this will include the billable transaction. With this, I have some information to share.

When receiving the payment, please know only the invoice will be automatically marked as paid, and the included bill will still display Unpaid status. To ensure it reflects as an expense in your project, you can manually mark it as Paid.

Here's how:

1. Go to the Projects menu, then click Transactions.
2. Find the open bill, then click View/Edit.
3. Click Mark as paid, then Save or Save and close.

Moving forward, you can include the billable bill in an Expense transaction. This way, it will be categorized as an expense in your project without requiring manual payment confirmation.

Here's how to create a billable expense:

1. Go to the + New, then choose the  Expense transaction.
2. Select a name from the Payee dropdown.
3. Fill out the Category details or the Item details section.
4. From the Customer/Project column, select your project.
5. Once done, press Save or Save and close.

Additionally, you can also use the 30-day trial of QuickBooks Online so you can experiment with or explore the features in it without risking your data.

To learn more about billable expenses, you can follow these articles:

• Enter billable expenses in QuickBooks Online
• Invoice customers for project expenses in QuickBooks Online

You can also run a report and customize it according to your preference so you can view the snapshot of your business.

We're still here whenever you need further information about billable expenses or projects. Please let us know in the comment section so we can further help you.

OK IrizA,

you said...

Also, yes, the customer will pay the invoice since the billable bill is included in the invoice. Since you mentioned that the bill still shows as unpaid, you can mark it as paid by following these steps:

1. Go to the Projects menu, then click Transactions.
2. Find the open bill, then click View/Edit.
3. Click Mark as paid, then Save or Save and close.

>>So, if the Bill is marked paid in this fashion, what is the journal entry?

I know the entry to first enter the Bill is:

Dr Expense Cr AP

Then when the bill is paid with a check the JE is: Dr AP Cr Cash

This gets rid of the bill.

In your answer the last part "Mark as paid' - what JE does that create?

But the Bill is made by and paying himself the owner of the company who is doing the work/Project for the Customer. It is really not a bill from a third party.

So, maybe this shouldn't be even entered as a bill, and just a line item on an invoice.

If the Expense transaction is entered as a Bill (+ then click Bill) and marked as Billable, and then added to an invoice. But not yet paid. When the Customer pays the invoice with this added Bill will it be marked as paid? Or does the company have to actually pay it to relieve it.

Since I don't have an extra copy of QBO, I have to ask all these questions. Otherwise, I would just run these transactions and test it.

I appreciate your prompt response, don052. Let me shed additional input to help you manage billable expenses from a client into projects.

In QuickBooks, billable expenses are expenses you incur on your customer's behalf when you perform work for them. Thus, if the Bill is marked as paid in your file, the entry for this transaction will be debited to your Accounts Payable (A/P) and credited to your cash or bank account.

To mark the Bill entry created into projects, mark the expense transaction as billable then charge them to the invoice. Once your customer pays the invoices with the added bill to it, this entry will be marked as Paid from the Projects center, and your invoices will be closed.

I'm sharing a screenshot below for reference:

Additionally, to guide you further in handling these transactions, I recommend consulting your accountant to seek professional guidance, so your books stay accurate.

On another note, you may want to utilize a QBO trial version of your company file to keep track of entries created and won't affect your real transactions.

Once everything looks good, you can run specific reports to help review your business finances, and then reconcile your accounts so they always match your bank and credit card statements.

I'll keep an eye on this thread for any additional queries when managing projects and expenses in your file. Feel free to reply in the comments below. Stay safe.

ok

Thanks for your response to my original question. all your suggestions helped me.

I just started a trial version and talked to support person who told me about this and I never tried it but it is something QB should OFFER FOR FREE Always to ProAdvisors... period. like a sandbox account that the competition offers every (they call them partners) partner. The sample company is really kind of bogus - since when you logout all your time spent testing something is lost since it is wiped out...

Anyhow, I am the Accountant/CPA and this is my only client that does anything like this - he is in construction... So, I have tried this Billable expense transaction years ago but QB seems to have gotten it worked out now.. I think. 

If I enter a billable expense and post it to a job/project, then it shows up as an expense, but then pay it, and then bill it to my client on an invoice - will it still stay on the job/project as an expense? but then offset by income - since I am invoicing it to the client. right?

In this situation that I originally described in this post, my client would be best served to just add this item in a normal invoice to his customer. as that would increase profitability for this project. and he never spent any money on the item.

I couldn't find a way to edit my last comment. 

So, since this bill is created by him to himself, he normally wouldn't pay it. But that is the only way creating a bill makes sense. He uses a third party software - construction software, that pushes these items to QBO and so I have told him to just create some kind of invoice from the other system, and add this item as product/service line on the invoice to his customer. That way he gets paid for his service, and to the customer they see it as an expense of the project. This way it does not show up on the project as a Expense but is included as income. 

From a traditional job costing standpoint, if the company created some kind of standard rate for this type of service, then they could apply it as an expense to the project. and invoice it to customer, but not really be an actual expense that gets paid to a third party vendor... QBO can't handle this situation - that I know of.