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.
Batch Invoicing, is a very useful new feature of QuickBooks 2011. It allows small business owners to create an invoice that can then be sent to multiple customers.
I’m sure there are many good examples of companies that would find this feature beneficial. A good example, that comes to mind, for using the Batch Invoicing option, would be a landscaper or a garbage collection company to bill customers weekly for mowing or trash removal.
Batch Invoicing is not available when Multi-Currency has been enabled in the Company Preferences tab of the Multiple Currencies Preference. (Edit menu -> Preferences -> Multiple Currencies -> Company Preferences tab.)
The Batch Invoicing option uses individual customer information; such as, terms, sales tax, and preferred send method for invoices. BEFORE you start working with the batch invoicing function, take the time to make sure that your customer information is set up correctly.
To verify that each Customer:Job is set up correctly, go to the Customer Center, click on the first Customer in the list and select the Edit Customer (job) button, OR right-click on the customer (job) name and choose, Edit Customer. If you will be emailing an invoice to a customer, make sure that the correct email address is in the Address Info tab, along with a contact name.
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On the Additional Info tab, make sure that each Customer (job) has a Preferred Send Method {for receiving billing invoices from you} selected.
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You also want to make sure that your “Send Forms” preference is set up correctly {from the Edit menu -> Preferences -> Send Forms -> My Preferences and Company Preferences tabs}.
On the My Preferences tab, check the option for “Auto-check the To be emailed checkbox, if customer’s Preferred Send Method (from the customer{job} record -> Additional Info tab -> Preferred Send Method) is e-mail,” option.
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Once you have all the settings and preferences in place………
From the Customers menu -> choose Create Batch Invoicing.
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This launches the Batch Invoicing Wizard – which has 3 steps:
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The first thing that you will probably want to do is to create a Billing Group; so from the Billing Group dropdown menu – choose <Add New>
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This launches a Group Name window, where you will give a meaningful name to the Billing Group you are creating, for example: Weekly Mowing.
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Click Save, and make sure that you select it.
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Next, viewing the Customer: Job listing on the left, begin selecting customer and/or jobs that belong to this billing group.
TIP: Hold down the CTRL key and click on various customer and/or job names in the list, once you have selected all the names, still holding down the CTRL key, click the Add button.
Click the Save Group button, and then, the Next button.
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Click the Save Group button, and then, the Next button.
This launches a window that looks almost identical to the body of an Invoice form. Here, you will select an Item (Cost Code), enter a Quantity, verify or add a rate, include a customer message, and click the Next button.
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Review the list of batch invoices you are about to create and click the Create Invoices button. Each individual invoice will be delivered using the Send Method indicated.
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Once you have clicked the Create Invoices button, a Batch Invoice Summary window will display. Click the Print button to print invoices and click the Email button to email invoices. When complete, click on the close button.
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Important Notes About the Batch Invoicing Feature:
- The only way to add new customers to an existing Billing Group is to do so at the Step 1 screen. Start at the Customers menu -> choose Create Batch Invoices:
- Select the Billing Group that you need to add names to from the drop down menu
- In the left column, click on the customer name(s) – remember holding down the CTRL key and clicking with your mouse allows you to select multiple names
- Click the Add button
- This add the selected name(s) to the right column
- Click the Save Group button
- Before clicking the Next button
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My only other issue with the Batch Invoicing Feature is that you cannot determine what Billing Group a customer or job belongs to in the Customer or Job Records – nor can you assign a customer or job to an existing Billing Group from the Customer or Job Records.
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See another article on Batch Invoicing by Charlie Russell of Practical QuickBooks.
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Progress Invoicing is a feature of QuickBooks® Pro, Premier and Enterprise editions, however, it is geared toward line item billing; more commonly used by contractors who work on large commercial and/or government construction projects involving a large scope of work or schedule of values and detailed line-item billing.
Any contractor can run into a customer billing issue when attempting to utilize detailed job costing in conjunction with QuickBooks Progress Invoicing.
A contractor will have to enter detailed information about labor, materials, subcontracts and other costs in the Estimate or Schedule of Values form in order to get an accurate Estimate vs. Actual report from QuickBooks.
An issue often will arise when the contractor bills his customer using a percentage of a Lump Sum Draw, rather than a percentage of completion for each line item.
For example, you submit a detailed Estimate to a customer for the installation of some wrought iron fencing around his property. The Estimate details amounts for Site Work, the fencing, installation of the fencing, and some excavation, providing a grand total for the project.
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However, your contract terms are 20% of the total contract price upon acceptance of the Estimate, 40% when the project is 40% complete, and the remaining 40% upon completion of the project.
Most times a contractor in this type of situation will prefer to have his Progress Invoice display a single line item for the fence installation as a single lump sum scheduled/estimated value with current amount being billed along with previous amounts or percentages that were billed.
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Because of their contract terms, the contractor does not want or need to show all of the line items on the progress invoice but does want to track the detail for job costing – this causes a conflict between what the contractor wants to see vs. what he wants his customer to see.
One solution to this problem would be to create a Custom Invoice Template in QuickBooks that would eliminate all of the columns except for the Description column and each time you created an invoice you would end up manually typing in the description (20% Draw, 40% Draw, etc.). The drawback to this solution is that you just eliminated the BEST feature of the Progress Invoicing function – no duplicate or redundant data entry; and the invoice ends up looking unprofessional.
The best solution, in my opinion, is to create a Group Item that includes the details of your job costing needs (up to 20 individual items can be added to a single group). A Group Item allows you to have a single description you can indicate that you DO NOT want to print the items within the group by simply by leaving the Print items in group option unchecked.
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Some people might feel that they would need to set up a new group item for every group of items that you use. If you always use the same combination of items on every job (with a few extra items here and there) such as Labor, Materials, Subcontracts, and Other Costs, you would create a “standard or master billing group” containing these items. When you encounter that job that has extra items – perhaps equipment rental – you can actually add an item for equipment rental to the group directly on the Estimate form. Once your group item has been pulled into the form, click into the group item (make sure that you are not above or below it), from the QuickBooks Edit menu -> choose Insert Line to insert a blank line, then from the item column access your item list and select the new item to be inserted. You can also use the Edit menu -> Delete line to remove items that will not be used for this specific job.
Progress Invoicing is a standard feature of QuickBooks® Pro, Premier, and Enterprise editions; each of these versions also offer several options for invoicing as well. In order to implement the Progress Invoicing function you must also utilize the QuickBooks Estimate function – this will eliminate repetitive data entry and help you achieve good job costing reports, such as Estimate vs. Actual reports.
To activate Progress billing you MUST first log into QuickBooks as the QuickBooks Administrator and be in single-user mode. From the Edit menu -> choose Preferences -> scroll down to Jobs & Estimate -> and click on the Company Preferences tab. Once you are in the Company Preferences tab, review and set the options as follows:
- Do You Create Estimates – should be set to Yes
- Do You Do Progress Invoicing – should be set to Yes
- Warn about duplicate estimate numbers – should be checked (this will prevent you from creating two or more estimates for different jobs with the same estimate number)
- Don’t print items that have zero amount – this option SHOULD NOT be checked (this allows you to display line items on a progress invoice even if you are not billing for them on the current invoice)
- Click Ok to save the changes that you have made.
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At this point, you can switch to multi-user mode so you and others can continue working.
Next, you’ll want to build your Estimate or Schedule of Values using the Job Cost Codes found in your QuickBooks item list. You will want to make sure that you QuickBooks Items or Job Cost Codes are set up as double-sided items in order to capture both expenses and income.
Your Estimate can be as simple or as detailed as you like – bearing in mind that an Estimate with multiple lines will provide better job costing information than a single line Estimate with the full dollar amount.
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Once you have your Estimate in place and you are ready to create your first progressing billing or draw, you will go back to the Estimate you created and look for an option that says “Create Invoice” – click on that button/option.
This opens a Create Progress Invoice Based on Estimate window, which provides you with 3 different options for creating your progress invoice:
- Create an invoice for the entire estimate (100%)
- Create an invoice for a percentage of the entire estimate (you then get to choose a percentage – 33%, 30%, etc.)
- Create invoice for selected items or for different percentages of each item.
Most construction contractors will choose the third option, to Create invoice for selected items or for different percentages of each item. After making your selection on how you want to create the progress invoice; click OK.
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This now opens a new window, Specify Invoice Amounts for Items on Estimate; where you will be able to see the various line items that are on your Estimate. You can specify the quantity, rate, amount or percentage for each item that you wish to bill for in the current period. As you enter amounts or percentages you will be able to see a running total for the current billing. When you are satisfied, click the OK button to have the information automatically populate the Progress Invoice form.
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If you didn’t enter an amount or a percentage for each line item on your Estimate, QuickBooks will display a message indicating that there are items with zero amounts.
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Most people will find this Zero Amount Items message to be very annoying; it can be turned off by checking the Do not display this message in the future and clicking Ok.
Following this procedure you have created your first basic progress invoice. When you Save it, you have automatically updated your Accounts Receivable, and can send it to your customer or General Contractor or you can use the information it contains to complete an special invoice format that is required.
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Progress Invoicing (also called progress billing, percentage of completion billing, or partial billing) involves billing from an estimate (or Schedule of Values) over the course of time and could be considered a type of installment billing. Progress billing is commonly associated with the construction industry; however, it is common in other industries as well.
QuickBooks® Pro, Premier, and Enterprise editions all offer several options for invoicing and a Progress Invoicing function is also available.
Some projects or jobs will require only a single invoice, others will require two invoices, others may require three invoices (one at the start of the job, one when you are 50% done, and the other when you are finished), other projects might require that you submit monthly progress invoices over the course of months or even years.
Typically, if you take on a job that you will have finished at the end of 30 days, you might only want to create a single invoice, unless retention or retainage is held for some reason, in which case you will have to create two invoices.
When your scope of work on the project will span one or more months, then you will want to consider progress billing. When you generate progress billings, you will bill ONLY for the work that you have completed and the materials that you have used or installed – occasionally you will also be allowed to bill for materials that you have at the jobsite but have not yet used.
If you are a subcontractor, sometimes the General Contractor will have a form that they insist you use (instead of your own invoice form), other times they may insist that you submit your progress billing on an industry standard billing form – such as the AIA G-702 & G-703 forms developed by the American Institute of Architects – or similar plain paper forms containing the same information.
Make sure that you submit your billings on the forms that they want or they will probably reject your invoice; mail it back to you and tell you to resubmit your billing CORRECTLY. Usually having to resubmit a bill means that you have to wait until next month to submit the corrected bill.
Always try to get your invoice paperwork right the first time and include any proper releases that are required. Sometimes the General Contractor will hold up everyone’s invoices —-even if only one contractor has submitted their billing incorrectly.
