QuickBooks Cost Plus Billing: Automatic Markup of Items
QuickBooks can do Cost Plus OR Time and Materials billing, however, Markups can only be calculated on Expenses. See this question submitted by a reader and learn about ways that you can mark-up Items.
In Premier, from everything I’ve read, asked experts, and surfed the web; a vendor purchased item that is to be applied to a job should be regarded as a non-inventory item, and applied to a COGS account. In entering the vendor’s bill the bill is recorded as an Item which then can be automatically linked to the customer on a time and cost invoice. Since the columns of the invoice can not be setup to preform math functions and only an Expense can be setup with a markup, is there away to apply an automatic markup on this vendor item on a invoice?
I’m confused as to why Intuit did not provide a method to do markup materials on what is very typical contractor transaction for a time and material invoice. Submitted by Ivan
Ivan, I agree with you, it’s confusing as to why Intuit didn’t add the ability to markup items for Time & Materials (Cost Plus) billing. I find it very annoying myself!
- Make sure that each Item has both a standard (or usual) cost and sales price and then create Price Levels and assign it to your customers or to specific jobs – this allows you to indicate that for a specific job you want to charge 25% (or whatever markup you choose) more than “usual”.
- Create a percentage based, single-sided Item linked to your Construction Income (or even a sub-account) that you will use to record Overhead & Profit. Pull all of your billable costs onto the Invoice, add a Subtotal, and then pull in the Overhead & Profit Item (it should then calculate the percentage based on the total costs)
- Estimates can be customized to include a Markup Column, so you “could” use the Estimate from to create the budget for your job, pulling in each item and adding a markup at the Estimate Level. You would then need to perform a 2-step process when you did your billing. Step 1 – would require that you generate a “normal invoice for all the time, expenses, mileage, and items – saving, printing, and then deleting it (this clears out the open “billable” items). Step 2 – involves going back to the Estimate and creating a Progress Invoice using the Invoice created in Step 1 for the dollar amounts/quantities billed.
I realize that this article only contains some general guidelines and suggestions, however, I hope you find it helpful – if you would like you can schedule some training time to discuss this further. If so, please take a moment of your time to leave a comment or to share it with others on your favorite social media network.