Many QuickBooks forms have a billable column, do you know what it’s used for and are you using it correctly?
Many QuickBooks forms have a billable column available for you to work with – checks, enter bills, timesheets, enter credit card charges, etc. The purpose of the billable column is to allow you to choose which expenses and/or time entries that you will be passing through to customers when you create an Invoice based on Time & Costs {also know as Time & Materials billings or Cost Plus billing in the construction industry.}
Welcome to Tuesday Training!
Tuesday Training is a new feature here on the QuickBooks for Contractors blog. While everyday focuses on training of one sort or another, Tuesday’s are dedicated to more in-depth training.
We’ll teach you the things you need to know about using QuickBooks, that you won’t find in the QuickBooks Help file, in order to successfully run your construction business and obtain accurate job costing reports; from eBooks, live webinars, and recorded training sessions.
You’ll find high-quality (budget friendly) training without having to leave the comfort of your home or office.
Important Facts About Items Left as Billable
Are you aware that if click into the billable column, which places a checkmark in the column {OR you leave that little Invoice icon found on many forms active and don’t “X” it out older versions of QuickBooks} that the information relating to that transaction line is stored within your QuickBooks file in a “waiting to be billed” status just taking up additional space and making your file larger than normal?
Selecting the billable column doesn’t mean that you want the costs assigned to this job {which is a common thought or assumption} but rather it tells QuickBooks that you want to take the information about that transaction and put it into a temporary database until you create an invoice for a specific customer using the Time/Costs button on the Invoice form.
If you really don’t pass these costs or time entries onto customers using the Time/Costs feature of QuickBooks – then this temporary database is just out there growing and growing – which causes the overall size of your QuickBooks file to become bigger and bigger.
If you are wondering if this is happening to you, an easy way to find out it to run an “Unbilled Costs by Job Report” {Report menu -> Jobs, Time & Mileage -> Unbilled Costs by Job} and look to see if there are a lot of entries in this report, if there are; all of those entries are just sitting there waiting for you to do something with them.
Download our 2 page article for instructions on how to clear out old unbilled costs – without having to edit each item in the report and manually making them unbillable.
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The QuickBooks Weekly Timesheet can cause a lot of confusion for users who are implementing employee time tracking for the first time, mainly because the timesheet contains both a Service Item and a Payroll Item. This article will explain what each column is used for and some common pitfalls that can happen.
Job costing and employee time tracking are important aspects of many businesses – not just construction businesses. However, when you initially set up timetracking there are many things that can cause confusion.
About Service Items:
The Service Item column represents the type of work that is being performed and allows you to select/enter/choose the name of the service item/cost code from your Item List that you want to use when your charge/bill your customer for this work – OR – when you pay a subcontractor/non-employee for this item.
Even if you do not intend to charge anyone for this work, entering a service item provides a record of the amount of time spent on this specific type of work. This information will then flow through the the various “Time by” reports as well as your job costing reports..
When a Service Item is brought into an Invoice, it tells QuickBooks which accounts to use to track the income you receive and what Cost of Goods Sold/Expense account to use to track the money your company has spent – so it’s important that your items are set up to capture both Income and Expenses. This provides you with the ability to analyze which types of work/services are the most profitable and how much company time is spent on producing them.
About Payroll Items:
Payroll Item column allow you to select a Payroll Item {that also exists in the employee record} which determines how much the employee should be paid for doing the work that you selected in the Service Item column. This information will then flow through into employee paychecks and perhaps any invoices that you create that are based on billable time and costs.
What if the Payroll Item Column isn’t displayed?
When the Payroll Item column doesn’t appear in the Weekly Timesheet, for one or all employees, it usually means that the employee’s haven’t been setup to utilize timetracking, and you’ll need to check the setup in the employee record to be sure that the “Use time data to create paychecks” option has been checked and that Time tracking has been turned on in the Preferences.
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An “audit trail” for Accounts Receivable in QuickBooks is only one of the many complexities faced by government construction contractors. Running any sort of construction business can be difficult – but the amount of paperwork, the level of detail, and the additional requirements for a government contractor can cause 2 and sometimes 3 times the amount for a bookkeeper. Below is a question submitted by a reader named Shirley.
We are a Construction Company and do government contracting. Is it possible to use the Accounts Receivable Summary to track each Project and the invoices when received and when paid. It has been several years since I have used QuickBooks and have never used the Construction Version. We have QuickBooks 2011 Premier Construction.
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First, let me say that the Contractor version doesn’t work any differently than the Pro – it just has some built-in construction specific reports and other features that aren’t available in other versions. So your learning curve shouldn’t be difficult at all! That’s the good news 
As for using the Accounts Receivable Summary Report as an audit trail, personally I don’t think I would use that because it wouldn’t give me the detail that I would want – OR – that I “think” you are looking for. The A/R Summary report only shows you how much {total} money is overdue in 30, 60, and 90 day increments. This information may meet your needs if you just need to know how much money is how many days overdue by job.
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My own personal preference, would be to know which invoices were how many days past due; therefore, I would rather run the Accounts Receivable Aging Detail to determine exactly which invoices where outstanding.
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Both of these reports would provide me with information about just a specific job – each could be modified and filtered for a specific job or jobs.
Another very good report, especially if you are concerned about a specific job, is the Customer Open Balance Report {available from the actual QuickBooks job record and choosing Open Balance}.
Another alternative to obtain this information easily, without running and printing reports – would be to customize how job record information is displayed in QuickBook, that way anyone who has access to this type of information can easily see it without having to run, print, and then distribute reports. Remember, it’s all about efficiency and streamlining the workload/work flow. Customizing how information is displayed in the job record let’s you quickly see how much total money is outstanding for a specific job, when invoices were created {dated}, the date you anticipate receiving the money, how many days outstanding the money is, what the invoice was issued for and the open balance.
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For tracking Vendor costs you could run a Job Cost by Job and Vendor Detail, click the Modify Report button and customize it like the screenshot below:
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QuickBooks can do many things, including provide you with an “audit trail” for Accounts Receivable and Accounts Payable. You just have to get in there an poke around and see what works for you.
While the information provided about may not answer the original question to the 100% satisfaction of the person asking it, based on the information provided it should at least provide you with things to look at and modify to best meet your needs.
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Dealing with special customer invoicing requirements can be a royal pain! Sometimes it feel like each customer you deal with says “if you don’t invoice me like THIS you aren’t going to get paid”. While QuickBooks is a very flexible software program, sometimes it’s very difficult to meet the requirements of specific customers or clients. Below is a perfect example, submitted by a reader of just how difficult billing requirements can be.
I use QuickBooks Contractor version as a self-employed contractor with a hospital. The problem is I get the job on a P.O. from the hospital, say it’s for $80,000. As I do different stages of the job I bill the hospital for that stage and they send me a check. When I do the next stage the hospital wants the invoice to reflect the original P.O. and the money they have already paid. How do I do that on this software? Jean
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Jean, I’m pretty certain that you can meet these requirements – it will cause some extra work on your part each time you are ready to bill the hospital for the next stage; but I don’t think it will be a lot of work.
Go ahead and create your invoice as usual – I’m making a BIG assumption here that you take the PO from the hospital and set that up as a QuickBooks Estimate and generate Progress Invoices from your Estimate {but even if you don’t that’s ok}.
Once you are viewing that Invoice in QuickBooks, click the Letters icon at the top and choose Prepare an Invoice Letter
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When the Choose a Letter Template window appears, select Invoice Letter with Details and then click the Next button
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This now sends your Invoice into Microsoft Word and by default provides information about the invoice that you can then modify to meet the invoicing requirements of the hospital.
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For example, I would change the heading called Invoice Amount $720.00 to read Original PO Amount $80,000.00, Invoice Balance $720.00 to read Previous Payments Received $XXX.XX, and add a line that reads Current Payment Due $720.00.
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NOTE: You can edit this letter template and include the changes to the wording – that way all you have to do is enter the amounts for Original PO and Previous Payments. To Edit a letter template go to the Company menu -> choose Prepare Letters with Envelopes -> Customize Letter Templates -> View or Edit Existing Letter Templates -> choose Invoice Templates -> Invoice Letter with Detail.
QuickBooks has a lot of built-in functionality – the problem is finding it! We hope you found this QuickBooks tip for dealing with special invoicing requirements to be helpful. If so please take a moment to leave a comment or share it on your favorite social network.
A QuickBooks for contractors tip about receiving and applying joint checks from a general contractor to pay a lower tier subcontractor or material supplier for work completed or materials on a construction project.
Quite frequently, in the construction industry, a contractor will receive a joint check from a General Contractor to pay their lower tier subcontractors or material suppliers for work completed and/or materials delivered to the construction project’s job site.
Unlike many high-end construction accounting packages, QuickBooks doesn’t have a way to handle this automatically — or easily.
This QuickBooks for contractors tip provides what we consider to be a best practice when a situation like this arises.
Problem:
Your company, Sam Subcontracting, received a $10,000.00 joint check from Joe’s General Contracting; which is made out to both your company AND O’Fallen Gravel {your Vendor/Material Supplier} who delivered sand, gravel, and crushed rock to a jobsite. The $10,000.00 was included in your most recent invoice totaling $45,000.00 that you sent to Joe’s General Contracting AND you have a $10,000.00 invoice from O’Fallen Gravel in Accounts Payable. Amy, your bookkeeper, isn’t sure how to correctly receive this payment against your own Accounts Receivable AND correctly apply this payment to your Accounts Payable.
Solution:
When Amy is ready to receive the payment against the invoice issued to Joe’s General Contracting AND record the payment to O’Fallen Gravel, she should do the following:
- Verify that she has a special “Clearing” Account in her QuickBooks Chart of Accounts that is a “Bank” type – if one does not exist she should create it by going to the Lists menu -> Chart of Accounts -> Account -> New -> Type = Bank -> Continue -> Account Name = Clearing -> Save & Close.
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- Click the Receive Payment icon on the QuickBooks Home Page – OR – from the Customers menu -> choose Receive Payments. Received From = Joe’s General Contracting -> Amount = $10,000.00 -> Date = Current Date -> Pmt. Method = Check -> Check # = Check Number -> Memo = Joint Check issued to O’Fallen Gravel -> Deposit to = CLEARING ACCOUNT. Click Save & Close.
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- The balance in the Clearing Account should now be $10,000.00.
- Click the Pay Bills icon on the QuickBooks Home Page – OR – from the Vendors menu -> choose Pay Bills. Choose the O’Fallen Gravel bill -> Method = Check -> Select Assign check number -> Account = CLEARING ACCOUNT.
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- Click Pay Selected Bills.
- In the Assign Check Numbers window – enter the number of the check that you received from Joe’s General Contracting.
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- Click OK
- The balance in the Clearing Account should be 0.
Make sure that you also have the proper Lien Waive and Release forms.
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