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.
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.
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.
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.