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

The QuickBooks billable expense income refers to the amount generated through certain costs. When you run a business or company, there are numerous expenditures that you need to look after. Office supplies, software license, internet connection, and other requirements are the expenses that 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 that the customers can reimburse them to you. These are the billable expenses.

QuickBooks lets you add these charges but before that, you need to understand more about 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?

A billable expense is a type of cost that you incur on the behalf of your customer. It is charged when you are performing some work for the customers. The billable expense can be recorded easily in QuickBooks. After doing so, the main purpose of this cost begins. It is helpful to track the billable hours. In addition, this record will enable you to keep a better check on the expenses.

What is Billable Expense Income in QuickBooks?

The QuickBooks billable expense income is considered to be the amount paid by a customer. It is paid to a company/business to reimburse the expenditures spent on the customer’s behalf. In simple words, when you spend your money on your customer’s behalf to execute his/her work, this amount becomes a billable expense that further generates an income.

How to Record Billable Expenses in QuickBooks?

It is easy to record and track billable expenses in QuickBooks when you understand the process in detail. At times, some users may not view the customer, markup, and billable columns on their computers. This is an essential part of the process that should be focused on. For this, you have to activate the billable expense income QuickBooks option or feature. Once you enable it, you can start setting up the expense and link it to the customer’s invoice.

Step 1: Enable the Billable Expense

To enter the billable expenses, one has to enable the tracking feature for them. By turning on this feature, you can easily capture the chargeable expenses in the software. Now, in order to turn on the billable expenses in QuickBooks, you need to open its Settings. From the Account & Settings menu, you can implement the correct settings. After setting up the bill payment, you can save the changes. With this, the feature or option shall be enabled.

• 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.

It is essential to correctly enable the QuickBooks billable expense feature. Additionally, when the other requirements have been fulfilled, you can move to set it up for recording the associated charges.

Step 2: Set Up the Expense

Once you enable the billable expense feature, you can start setting it up in your QuickBooks account. In this way, you can bill the actual buyer for the business expenses and get reimbursement for the same. To make it happen, you are required to create a new transaction and select the payee’s name. After this, select the expense account from the Category menu. As you include the right amount, you can make it billable to complete the setup.

• 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’s 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 person for whom you are adding the QuickBooks billable expense.
• Besides that, make sure that the makeup percentage is correct.
• Once done, click the “Tax” checkbox.
• Now, select the tax agency that 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 charges to the invoices. By linking the billable expense to the customer’s invoice, you can get the reimbursement or income. To do so, you need to select the relevant invoice and the customer for whom the billable expense is created. After this, you can save changes. This will help you generate the QuickBooks billable expense income eventually.

• 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 expense to the invoice and send it to the considered customer, he/she can proceed with the income. 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. 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, locate where the “Gear” icon is in QuickBooks.
• 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. In this way, you can manage the billable expenses, payroll, and time for your projects.

How to Add Billable Expenses to Invoice in QuickBooks Desktop?

To add or record billable expenses to invoices in QB Desktop, you can make the markup amount taxable. Then you can port it to the income account or hide it as required. However, when you print your invoice, the customer will only be able to view the description and the total amount. This will include the markup and billable expenses. In addition, you can also view the description of every billable expense and mark up the value on the invoices.

• In QuickBooks Desktop, click on the “Customers” option.
• Select the “Create Invoices” button.
• Choose the customer that 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 add the billable expense taxable.
• Here, you can choose the print option for the 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. Later on, you can move to generating the QuickBooks billable expense income in the Desktop version.

What if QuickBooks Billable Expense is not Showing up?

Although billable expense is quite a helpful feature, it can still come up with unexpected errors. Some users may not see this option on their customer’s invoices in QuickBooks. This may happen for several reasons. Some of these can include instances wherein the following is observed:

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

Considering that you are unable to find the billable expense on the invoice, you can perform several steps to resolve this issue. First of all, you have to make sure that the QuickBooks 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 Customers button. After adding the relevant details for this customer, you can add the parent customer as well.

• From the left menu, choose the “Sale” option in QuickBooks.
• 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.
• When done, click on the “Bill with Parent” option and select the bill.

Apart from this, you can make the items and expenses billable. You can also record the expenses as billable and add them to the invoices.

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

There are instances wherein no expenses may have been incurred on behalf of your customers. Thus, given that you no longer wish to use the billable expense in QuickBooks, you can turn this feature off. The settings of the software will give you the option to edit your preferences. As you edit them, you can deactivate the feature.

• To get started, navigate through the “Settings” icon in QuickBooks.
• Select the “Account and Settings” menu.
• Here, select the “Expenses” button.
• Now, choose the “Bills and Expenses” option.
• Hit the “Edit” button.
• You need to remove the checkmark for the “Track Billable Expenses & Items as Income” option.
• Press the “Save” option.

In this way, you can disable the billable expense feature in QuickBooks. Please remember that when you want to invoice the customer for QuickBooks billable expense income, you will have to enable this feature again.

Key Takeaways

As is well known, in QuickBooks, you can charge customers for billable expenses by linking them to their invoices. However, before creating the billable expense, you will have to enable the feature. Thereafter, they will pay back the amount you spent on their behalf. In doing so, ensure that you correctly enter all the values. This will maintain the accuracy of your QuickBooks billable expense income that is eventually generated.