What is Billable Expense Income in QuickBooks & How to Add Billable Expenses in QuickBooks?

What is Billable Expense Income in QuickBooks & How to Add Billable Expenses in QuickBooks?

When you run a business or company, there are numerous expenditures you need to look after. Office supplies, software license, internet connection, and other requirements are the expenses you need to pay for. Such purchases refer to the expenses in businesses.

However, in some instances, you might purchase something on the customer’s behalf. This type of expense is usually linked to the invoices so the customers can reimburse it to you. QuickBooks lets you add these billable expenses but before that, you need to understand what is billable expense income in QuickBooks.

Once you understand the entire concept, you can easily add the billable expense income in a few simple steps. Remember, the billable expenses can be added in QBO and QBDT as well.

What is Billable Expenses in QuickBooks Online/Desktop?

The billable expense is a type of expense that you incur on the behalf of your customer when performing some work for the customers. The billable expense can be recorded easily in QuickBooks. By doing so, you can track the billable hours and expenses as well. As you do so, you can get reimbursement from the customer after they get the invoice.

What is Billable Expense Income in QuickBooks?

QuickBooks billable expense income is considered the amount paid by the customer to reimburse the expenditures spent on the customer’s behalf. In simple words, when you spend your money on the customer’s behalf to execute their work, this amount becomes a billable expense that you can send to the customer to pay you back. In addition, you can record and track the billable cost so that your customers can reimburse after they received the invoice with billable expenses attached.

How to Record Billable Expenses in QuickBooks Online?

As stated earlier, it is easy to record and track billable expenses in QuickBooks. However, some users may not view the customer, markup, and billable columns on their computer. If this happens to you then you have to activate the billable expense first. Once you enable the billable expense, you can start setting up the expense in QuickBooks and link it to the customer’s invoice.

Step 1: Enable the Billable Expense

To enter the billable expenses, one has to enable the billable expense tracking feature. By turning on this feature, you can easily capture the chargeable expenses in QuickBooks.

In order to turn on the billable expenses in QuickBooks Online Essentials or other desktop versions, you need to open QB Settings. From the Account & Settings menu, you can implement the correct settings. After setting up the bill payment, you can save changes.

  • Click on the “Settings” icon.
  • Then, click the “Account and Settings” option.
  • Switch to the “Bills & Expenses” field and press the “Edit” button.
  • At this point, you can enable the following options:
    • Make the “Items” table visible on the expenses & purchase forms.
    • Track items & expenses by customer.
    • Also, make the items & expenses billable.
  • (This is optional) Now, you can arrange the following:
    • Billable expense tracking
    • Markup rate
    • Sales tax charge
  • You can also set up the “Bill Payment” terms.
  • Click the “Save” button.

Step 2: Set Up the Expense

Once you enable the billable expense feature, you can start setting up the expense in your QuickBooks account. This way you can bill the buyer for the business expenses and get reimbursement for this.

To make it happen, you are required to create a new transaction and select the payee name. After this, select the expense account from the Category menu, enter the amount & description, and make it billable.  

  • Click on the “+New” button.
  • Then, go to the transaction that you wish to create. It could be an expense, check, or bill.
  • After this, choose the payee name.
  • Now, switch to the “Category” section.
  • Then, choose the expense account for the transaction.
  • Here, you can add the amount and description of the expense.
  • After that, mark the “Billable” option.
  • From the “Customer” section, you can choose the customer for whom you are billing the expense.
  • Besides that, make sure that the makeup percentage is correct.
  • Once done, click the “Tax” checkbox.
  • Now, select the tax agency you wish to charge the tax.
  • Click the “Save & Close” button.

Step 3: Add Billable Expenses to Invoices

After you set up the expenses, you can continue adding the billable expense to the invoices. By linking the billable expense to the customer’s invoice, you can get the reimbursement.

To add billable expenses to invoices, you need to select the relevant invoice and the customer for whom the billable expense is created. After this, you can add it to the invoice and save changes.

  • Click on the “+New” menu.
  • Then, choose the “Invoice” option.
  • From the “Customer” drop-down option, you can start selecting the customer for whom you have created the billable expense. This will open an “Add to invoice” screen as well.
  • Here, you can click the “Save & Close” button.

As you add the bill expense to the invoice and send it to the considered customer, your customers can proceed with the reimbursement. This way you can get QuickBooks Online billable expense income.

Step 4: Add Billable Expenses to Estimates

Besides invoices, in case you want to link the billable expense to estimates, it might not be possible as this feature is currently unavailable. As an alternative option, you can use the Project feature. This will let you track the billable expense, time, and payroll for every individual project in QB.

  • To use this Project feature, click on the “Gear” button to open the settings.
  • Then, choose the “Account and Settings” button.
  • Select the “Advanced” tab.
  • Choose the “Projects” option.
  • Hit the “Pencil” icon to edit your details.
  • Now, you can toggle the option to organize all your job-related activities in just one place.
  • Press the “Save” option.
  • Click the “Done” button.

After you complete the steps, you can create your projects. This way you can manage the billable expenses, payroll, and time for your projects.

What If You Have to Disable the Billable Expense Feature in QuickBooks?

In case you no longer wish to use the billable expense in QuickBooks, you can turn this feature off. To do so, you can go through the Account & Settings menu from the QB Settings tab. After this, select the Bills & Expenses from the Expenses tab and edit the details. Now, remove the checkmark for Track billable expenses & items as income options.

  • To get started, navigate through the “Settings” icon.
  • Select the “Account and Settings” menu.
  • Here, select the “Expenses” button.
  • Now, choose the “Bills and Expenses” option.
  • Hit the “Edit” button.
  • Here, you need to remove the checkmark for the “Track billable expenses & items as income” option.
  • Press the “Save” option.

This way you can disable the billable expense feature in QuickBooks. But remember if you want to invoice the customer for QuickBooks Online billable expense income then you will have to enable this feature again.

How to Add Billable Expenses to Invoice in QuickBooks Desktop?

To add billable expenses to invoices In QB Desktop, you make the markup amount taxable, port it to the income account, or hide it. However, when you print your invoice, the customer will only be able to view the description and total amount including markup and billable expenses.

In addition, you can also view the description of every billable expense and mark up the value on the invoices.

  • Click on the “Customers” option.
  • Select the “Create Invoices” button.
  • Choose the customer you added to the bill.
  • Switch to the “Billable Time/Costs” screen. Here, you can mark the option for adding the outstanding billable time & cost to the invoice.
  • Once done, switch to the “Expenses” menu.
  • Now, select the appropriate markup amount, income account, and expense.
  • After this, choose the taxable expenses. This will help you to add the billable expense taxable.
  • Here, you can choose the print option for selected time & costs as a single invoice item. This will hide your markup value.
  • Hit the “OK” button.
  • By using the “Print” drop-down option, you can press the “Preview” button. This will show you the total amount of the invoice including the markup value and billable expense.
  • Once done, click the “Save & Close” option.

With these steps, you can record the billable expenses in QuickBooks Desktop. If required, you can customize the invoice and add the information you want.

What If Billable Expense is Not Showing Up?

Although billable expense is quite a helpful feature, it can yet come up with unexpected errors. Some users may not see this option on their customer’s invoices. This may happen for several reasons. For instance,

  • The billable expense setting is not updated.
  • Billable expense service is disabled.
  • Due to empty fields, you are unable to assign the billable expense to the customer.

If you are unable to find the billable expense on the invoice, you can perform several methods to resolve this issue.

First of all, you have to make sure that billable expense service is enabled. Besides that, you can add the sub-customer. To do so, choose the customer from the Sale option and click on the new customer’s button. After adding the relevant details for the customer, you can add the parent customer as well.

  • From the left menu, choose the “Sale” option.
  • Select the “Customers” option.
  • Click on the “New Customers” option.
  • Enter the required details to add the new sub-customer.
  • Once done, mark the checkbox for “Is Sub-Customer”.
  • Click on the “Enter Parent Customer” drop-down option and select the parent customer.
  • Once done click on the “Bill with Parent” option and select the bill.

Apart from this, you can make the items and expenses billable, record the expenses as billable, and add the billable expense to the invoice.

Takeaway

As is well known, in QuickBooks, you charge customers for billable expenses by linking them to their invoices. However, before creating the billable expense, you will have to enable the billable expense feature in QuickBooks. Thereafter, pay back the amount you spent on their behalf you can set up the billable expense and link it to the customer’s invoice so they can 

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