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Chapter 1

Chapter 1. Pass-Throughs . 1. Objectives. What makes an expense Billable, Not Billable, or Billed How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers How to add reimbursable Expenses, Items, Mileage, and Time to Invoices

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Chapter 1

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  1. Chapter 1 Pass-Throughs 1

  2. Objectives • What makes an expense Billable, Not Billable, or Billed • How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers • How to add reimbursable Expenses, Items, Mileage, and Time to Invoices • How to use two-sided Items to track reimbursable expenses • How to use two-sided Items to track custom ordered items • How to use two-sided Items to track subcontracted services • How to use the Unbilled Costs by Job Report • How to use the Time by Job Report • How to use the Vehicle Mileage Tracker in QuickBooks • How to handle Multiple Pass-Throughs on a single Invoice 1

  3. Objective What makes an expense Billable, Not Billable, or Billed

  4. Reimbursable (Billable) Expenses • QuickBooks allows you to pass expenses through to customers for reimbursement • To track a reimbursable cost, you’ll first need to record the expense • Enter a transaction such as a Bill, Check, or Credit Card Charge to record the original expense, • And then assign the customer or job to which the expense applies • Then you create an invoice for the customer, to pass the cost • If you assign expenses to jobs, but do not intend to pass them through for reimbursement, • Click the invoice icon so that it has a red X through it • This makes the line item “Non Billable” 2

  5. Objective How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers

  6. Record Expense transactions involving Expenses, Items, Mileage and Time billed to your customers • You can use Enter Bill or Write Checks window to enter the expense • To make it billable to customer • Enter a Customer or Job name in Customer:Job field • The invoice icon shows that the expense is billable • Save and Close 2

  7. Objective How to add reimbursable Expenses, Items, Mileage, and Time to Invoices

  8. How to add reimbursable Expenses, Items, Mileage, and Time to Invoices • Open the Create Invoices window • Enter theCustomer or Job name (used above) in the Customer:Job field, a message appears to remind you that this job has expenses that you designated as billable • Click Time/Costs icon to display the reimbursable expenses for this Customer • Use appropriate tabs to see reimbursable Items, Expenses, Time, and Mileage that have accumulated • Click in the Use column to select this expense for reimbursement, this will cause the expense plus the markup (if any) to show on the Invoice • Save and close invoice 3

  9. Sales & Customers Company Preferences for Reimbursable Accounts • Sometimes it is more appropriate to track reimbursable expenses in one account and the reimbursements in another account • For QuickBooks to handle reimbursements in this way, you will need to make changes to your Sales & CustomersCompany Preferences • Set the default markup for your reimbursable expenses and Inventory Items • When Track Reimbursed income as expenses box is checked, you can associate income accounts with expense accounts, so that when you pass an expense through to an Invoice QuickBooks will increase the associated income account • you need to associate each reimbursable expense account with an appropriate income account 8

  10. Objective How to use two-sided Items to track reimbursable expenses

  11. Using Two-Sided Items (Pro and above only) • QuickBooks Pro and above allows you to use the same Item (called Two-sided item) on expense forms (e.g. Checks and Bills) and sales forms (e.g. Invoices and Sales Receipts) • Two Sided Item – An Item used on both types of forms is commonly called a “Two-Sided Item” because the Item setup screen includes purchase information on the left side (Expense Account field) and sales information on the right (Income Account field) • For two-sided items, you can generate reports showing the profitability of each Item • Possible uses of two-sided Items include: • Reimbursable Expenses • Custom Ordered Parts • Subcontracted Labor • Cost of Goods Sold postings 10

  12. How to use two-sided Items to track reimbursable expenses • you can create two-sided Other Charge Items to designate categories of expenses (e.g. transportation, clerical, or material expenses) • Use these Items on both expense transactions and sales forms 10

  13. Objective How to use two-sided Items to track custom ordered items

  14. Tracking Custom Orders If you sell products that you don’t hold in inventory, you can use QuickBooks Pro’s “two-sided Items” to automatically track the revenue and costs for each Item This is a “two-sided” Item. It allows you to specify a separate account for the costs and the revenue on a single Item setup screen. 11

  15. Objective How to use two-sided Items to track subcontracted services

  16. Using Service Items to Track Subcontracted Labor • If you hire subcontractors, you may want to create a two-sided Service Item for each subcontracted service • This will allow you to pass subcontractor costs through to Invoices and it will allow you to create reports showing the profitability of your subcontracted services 17

  17. Objective How to use the Unbilled Costs by Job Report

  18. Unbilled Costs by Job Report • Create an Unbilled Cost by Job report to view all of the billable expenses and Items that you haven’t passed through to Invoices • Select the Reports menu,choose Jobs, Time & Mileage, and then choose Unbilled Costs by Job 21

  19. Billable Time from Timesheet • If you enter timesheet information into QuickBooks that includes a customer or job name, you can pass the time through to the Customer’s Invoice • From the Employee Navigator, choose Use Weekly Timesheet. • On the Timesheet, enter subcontractor’s name in the Name field and click Set Date • As you enter the date, QuickBooks will display a weekly timesheet showing the billable hours 21

  20. Invoicing for Billable Time • Click Invoice on the Icon bar • Enter customer and job in the Customer:Job field • Click Time/Costs to pass billable time through to this Invoice • Click the Time tab, click Options to modify how timesheet information is transferred to Invoices • Click OK to save the settings in the Options for Transferring Billable Time window • From the Choose Billable Time and Costs window, click Select All to use all of the time activity for this customer • The timesheet activity you selected on the Choose Billable Time and Costs screen now shows on the Invoice • Enter Job information in the Memo field of the Invoice 23

  21. Objective How to use the Time by Job Report

  22. Time by Job Report • To see all the customers that need to be invoiced for services, use a Time report such as Time by Job • Select the Reports menu, then select Jobs, Time & Mileage, and then select Time by Name • Set the date fields • Click Modify Reportto format the report to display the Billed and Unbilled columns 22

  23. Objective How to use the Vehicle Mileage Tracker in QuickBooks

  24. Vehicle Mileage Tracking (Pro & above) • QuickBooks Vehicle Mileage tracker allows you to track vehicle mileage, post mileage to invoices, and run reports for tax preparation • To set up mileage tracking, • Create an Other Charge item called Mileage • Select the Companymenu and select Enter Vehicle Mileage • Select Add New from the Vehicle drop-down list and enter vehicle name and description to create an item in vehicle list • To set up your mileage rates, click the Mileage Rates button and enter the mileage rate designated by the IRS for the appropriate tax year • Complete the Enter Vehicle Mileage window • Click Save & Close to save your mileage entry 27

  25. Vehicle Mileage Tracking Reports • To create reports about your mileage • Select the Reports menu, then select Jobs, Time & Mileage, and then select Mileage by Vehicle Detail • QuickBooks displays the rate based on the year the miles occurred • It uses the Mileage rates window to look up the rates • To see all mileage that has not yet been billed, use a Mileage report such as Mileage by Job Summary • Select the Reports menu, then select Jobs, Time & Mileage, and then select Mileage by Job Summary • Click Modify Reportto format the report to display the Billed, Unbilled, and Not Billable columns 29

  26. Objective How to handle Multiple Pass-Throughs on a single Invoice

  27. Multiple Pass-Throughs on One Invoice • From the Customer Navigator, click Invoices • Select Customer name from the Customer:Job list and click OK to the billable cost reminder • Select Time/Costs and click the Mileage tab • Select Use on the Mileage, Items, Expense • Click OK to post all selected pass-throughs to the invoice • Click the Time/Costs button on the invoice to re-display the Billable Time and Costs window. • Click the Time Tab and click Select All on the unbilled Expenses • Then click Print Selected time and costs as one invoice item • Click OK to post all of the selected pass-throughs to the Invoice • Preview the resulting invoice by choosing Print and Preview 31

  28. Chapter Review • What makes an expense Billable, Not Billable, or Billed • How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers • How to add reimbursable Expenses, Items, Mileage, and Time to Invoices • How to use two-sided Items to track reimbursable expenses • How to use two-sided Items to track custom ordered items • How to use two-sided Items to track subcontracted services • How to use the Unbilled Costs by Job Report • How to use the Time by Job Report • How to use the Vehicle Mileage Tracker in QuickBooks • How to handle Multiple Pass-Throughs on a single Invoice 35

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