 And the thing we want to be careful of is where it says track expenses and items as income. Notice if you don't do that then it can cause you problems. Let me check that off and just to show you what I mean you have to be careful of this meaning I'm going to close this out. I'm going to use the other format of having something debilable which is often done in like a construction company or something like that where you're going to have expenses that you're going to be applying out to a job or sub-customer or a project and then you're going to use that billable item. So let's go I'm going to go up top and say okay let's now make a check form for example I'm just going to make a check form I'm going to call it a check and I'm going to use that billable capacity because I'm going to say that this expense that I paid I want to pull over and then invoice the customer for it so I'm going to say it's a check that went to let's say office depot we'll say and then it's coming out of the cash account the date let's make it 130 the check number I'm going to bring it up to the 141014 the check number is a little off because we made a change to the check numbers in a prior presentation so I think that's the proper check number at this point and then we're going to go down and say the category let's just say a supplies supplies and it's going to be an expense account for supplies and then the amount we'll say is 130 and then the key here is I'm going to say it's billable I'm not going to say that we're going to tax on it we're just going to say it's billable which means I'm going to pull it into the client when I make when I make an invoice now again we have the option of using either the sub customers we could charge it to just a customer but if we if we have jobs then we could use the sub customer which is like a job or the new kind of project form I'm going to go into Sam the guitar man and use the project component here so we'll use the project there so it's under Sam the customer and then we made a project which was project two for it so this will be an expense it's going to decrease the checking account the other side is going to go to supplies expense as we would expect but then we're going to we're going to turn around and we're going to create an invoice now the problem is that we didn't really use an item notice we just applied it to an account here so this billable thing doesn't have an item which is usually what we used to pull it into an invoice and that means we have some limitations in terms of how it's going to be recorded when when we pull it over now so it could just go into an income account or if we if we don't have that check off that we did in the preferences it might make a negative expense and that's what I want to just point out and be careful of because that's not usually what you want to have happen so let's save it and close it and then obviously if I go to that transaction balance sheet account just like what we would expect a checking account should go down right we got the decrease to the checking account for the check that we made right there and the other side if I go back is on the expenses let's go back to just the total here and then run it and then we should have an expense of supplies within supplies we've got that 130 right there that looks normal let's go back and now we're going to bill out for that amount so I'm going to go to the first tab and hit the plus button and we're going to make an invoice and let's make the invoice now for the job or the project under Sam the guitar man project two then we have these items that want to be added for the billable items on the right and so then I'm going to say add let's just add all of them so I'm going to add all ones for the time sheets that we put in and the others for that supplies item so I'm going to have the date at 130 that's fine let's keep that and then down here notice the time pulls in beautifully and notice that we used an item to do the time even though we used kind of that billable linking function it still uses an item giving us a lot of control over the account that's going to be impacted on the income side of things we could see it's linked and notice here it doesn't give us an item or a product or service and that's that's the issue that means we have a four less control over where QuickBooks is going to put it it's pulling in this billable thing and because it's linked to the expense account it doesn't have we don't have as much flexibility because it's not using an item that's the problem so we could have had it just go to an income account that's what we would typically want if you don't have that checked off it might have a reimbursement of the expense which is going to do here which I'm going to say is not really what we wanted to do that's the point and also notice it's linked so you could see the link in order to put the description it would be nice if it put a description supplies we when we add the billable item we might want to add the description of the account that's affected or so on so it could pull this over but you can go to the link to find it so what's this going to do well it's an invoice it's going to increase the accounts receivable other side's going to go to the revenue account for this amount driven by the item but this amount because we turned it off we turned off that automatic revenue and there's no item that we can use to tell it where to go is going to be going to maybe reimbursing an expense account which is not exactly what we want let's check it out I'll show you what I mean we're going to save it and close it and then I'm going to go to the tab to the right and refresh it and then I'm going to go into the accounts receivable and we should have that project so there's the project so that looks good the full amount increasing there the other side if I go to the P to the L the profit to the loss the income statement and I open up the services this is including the amount that was that was from here this one from the 800 portion of the invoice for the time that we charged which looks good the 130 though isn't there instead if I go back on up it's going to be under the supplies and look what it did here it went it did a reimbursement kind of thing the supplies went up and then it went back down so the the net impact on net income I've seen some accounts set up like this is why I want to point it up point it out because the net impact on net income will be the same so you might say well what's the big deal it went up and it went back down because I got reimbursed by the client for the thing because I added it onto the invoice but that's not usually what we want to do usually what we want to do is add what we've got in revenue up on the income side and then add and then subtract the expenses down below that's what you want on your tax return typically you don't want it you can't tell the IRS basically yeah well supplies is netting down to 500 because I paid for some supplies and then they reimbursed me for the supplies that's not even though the net amount at the bottom is the same what you typically want is to say yeah as part of my billing process I charged them for the things I used in the billing process therefore I want revenue to go up for the total I charged them including the expenses I did in the job and then subtract out the the supply so I'm going to keep that as it is right now but I just want to point that out as something that you that you don't typically want to do so there's a couple ways to fix that we could try to use items which give us more control