 QuickBooks Desktop 2023 Interbillable Time and Expense and Invoice Let's do it within 2-its QuickBooks Desktop 2023 Here we are in QuickBooks Desktop, get great guitars, practice, fire We started up in a prior presentation going through the setup process We do every time, maximizing the home page to the gray area Going to the view drop down, noting that we got the hide icon Bar open windows list checked off, open windows open on the left hand side Reports drop down, company and financial P&L profit and loss With the change in of the range in 010123 to 123123 Let's customize it and fonts and numbers changing it to let's say 14 Okay, just to be the same that we've done before Okay, yes and okay Reports drop down again, company and financial, this time balance sheet Customize it with the range in changing 010123 to 123123 And fonts numbers change 12, 13, 14, 14, 14 We decided on that before So that's what we have, that's the setup process that we do every time Let's go back to the home page We're now going to be thinking about entering time into some kind of job cost type of system So that we can use that time in order to create an invoice Now note that when we have this enter time item down below It's in the employee's area So we get a feeling like this is a required field for the entering of time to process the payroll That's not necessarily the case Because for example we might have employees who are salaried employees So we don't have to enter the hours at all Or we might have some other system that they're tracking their hours They might just give us their hours on a weekly basis with an Excel sheet or something like that Or we might have an external thing that's going to be tracking their time That we'll use to then populate into our pay employees when we process the payroll Weekly, bi-weekly, semi-monthly or monthly or whatever We're going to use the enter time sheet which is often useful to create the invoice So that would happen often times when we have some kind of job cost system Usually when we think of a job cost system we're thinking of like a construction company Because we might be thinking about those longer term types of jobs for a construction company But also service companies that are just providing services often have a job cost system So if you're in a law firm or a CPA firm or a bookkeeping firm often are structured where you have some partners Then you've got staff, the staff is going to be working on the jobs And if you ever, I see that, what's that movie where the devil's advocate or something like that Where he's a lawyer and the guy tells him I don't care if you're even thinking about a client when you're in a taxi or something You've got to have it billable, it's got to be a billable thing, right? So there's pressure to bill the clients for a particular job So we set up in a prior presentation the concept of jobs So if I go to the customer center which you can do here or go to the customer drop down and customer center up top We have our customers, these of course are going to be the people that we are going to be collecting Hopefully money from at the end of the revenue cycle But if we have a job cost type of system where we're providing something that's not standardized And or takes a longer amount of time to provide a custom service or goods to somebody Then we might have a customer and then create jobs for that customer Because we might have multiple jobs if we're doing custom contracting We might have multiple, a deck that we're creating, a fence that we're creating over here A different property where we're making something else, some other place And we want to track those as different jobs even though it's for the same customer If we're doing a job cost system in a service company like bookkeeping or like a law firm Let's say like a law firm might have different components of what legal things they're dealing We've got Jones guitars might get sued all the time This guy's just a superman magnet And so he's got multiple lawsuits or whatever that we're going to record in jobs We're going to track those jobs separately for example And every time the staff has some work that they do for that particular customer They want to assign it not only to Jones guitars but also to the particular job that they are working on If it's a bookkeeping firm or CPA firm, we might be doing Jones guitars And we might have a job set up for them to do bookkeeping and taxes and whatnot Although we might also just simply build Jones guitars for the multiple things we do for Jones guitars Which could be divided out by the items that we're setting up If I go to the list drop down and we go to the items list We've got our list of items that of course we might be doing And the items will be driving how we're going to populate say the invoice So let's go to the homepage and imagine we're going to be entering the time for some of our staff We've got two employees that we have set up. We've got our jobs set up Now we're going to imagine that we're going to enter the time into the system So that it can then be used to create an invoice to build a client for the work done I'm going to add it on a weekly time sheet so we could activate QuickBooks time So we won't get into turning on time tracking up here So you can look into that. It's kind of a more specialized area in and of itself That's another option you can look into if this is something that would be very useful to you specifically You got used weekly time sheet time entry single activity I'm going to use a weekly time sheet and so we're going to enter the weekly time sheet I'm going to say this is for first Erica Erica Smith who is would you like to set up an employee to use time data during paycheck creation I don't want to use their time here for the payroll I just want to use it for the invoicing so I'm going to say no for this one If you if you did want to use it for payroll and invoicing you can do that Note that when we invoice the client we might have different rates might have higher rates than what we pay the employees That would kind of make sense right they might be we might tell our employees or our staff That we they have to enter their time sheet for whatever time they worked And we want at least a certain amount of their time billable to the clients And then we might pay them an hourly rate or maybe not we pay them salary possibly And then we're going to be charging the customer some rate that's not necessarily related to their hourly rate So I'm going to say this is going to go for the customer job which is going to be 3005 I'm going to say Which is Jones guitars and then we've got the customer of 3005 or the job of 3005 The service item now we could pick up the service items that we actually did So if it was a bookkeeping company we could say whatever we did for that particular customer So in that case we might have just Jones and then we might say that we did bookkeeping for them We did taxes for them or we did whatever other job And the service item would then be driving the billable item for that particular person Or we might try to charge by person we might say I have different levels of staff member perhaps And I'm trying to say well this is my best person I'm going to if he's working or she's working on your job I'm going to charge you a higher rate I'm going to charge you by the rate of the person that's on the job And I'm going to try to assign the people to the jobs that are suited to the rate that I'm charging for them That's what I'm going to imagine we're doing here I'm going to set up a new item and we're going to say it's a service item And I'm going to say that the item is just going to be Erica's rate Erica rate This is not the rate we pay her this is not payroll this is the rate we charge for her for the jobs that she's working on So we're going to say that that is $100 let's say and the tax code no tax on it because we're going to say it's a service item That represents the sales tax code and then I'm going to take it to a revenue account and this is a different kind of revenue Because we're charging so maybe I could put it just into the service let's put it just into service revenue We'll put it into service revenue and then I'll say okay that looks good So I'm going to say that she worked on Friday eight hours on that I'm going to say it's billable it's billable by default because we set we checked off that it would be billable by default In the preferences when we set up the preferences edit preferences and we set up our items Which are down way down here under time and expenses company preferences We said that we want to mark all time entries as billable as the default right so then we have it billable item here And then the next one I'm going to say it is Smith guitars and let's say it's job number 4002 So notice it puts the name and then 4002 this is going to be Erica's time that we're going to be billing out on it And I'm going to say that happened on Saturday Now note that if they worked on the same job here on Monday and Sunday Then I don't need another line item to record it because I can just record it here But if they worked on different jobs that's of course when you're going to need different line items So you might say well why don't I just enter the time Monday Tuesday Wednesday Thursday Friday on one row For example you could do that if they worked on one job the whole time or if you're not entering the jobs because it's not billable time Otherwise you're going to have to have a new column or a new row I mean every time there's a new thing that was worked on That's the general idea so we're just going to keep it now so there's 16 hours That means when we create an invoice for Jones guitars or Smith for the job of 3005 or 4002 QuickBooks is going to ask us due to it being billable if we want to pull in that billable time So let's just look at that now as they save and close so we can imagine having our staff our employees do that periodically Possibly weekly possibly monthly and then at the end of each month possibly we would then go into our invoice up top And say now I'm going to bill for the prior month of activity for my bookkeeping or CPA firm We could then go into 3005 for example tab and QuickBooks is saying hey do you want to select these billable items As we saw in the pop-up before when we connected the invoice or the invoice to the billable item for the inventory that we processed through And then I'm going to say it's billable so I'm going to say okay and so now we've got our options up top This time is usually the first one so there it is If we had other items like expenses mileage items we saw items before we can go through and select those if they were there as well We're going to pick just this one and then if we go through I'm going to put the date at 13023 Invoice number populates automatically net terms and there we have the item that we set up eight pulled in from the time entry $100 at the rate for $800 total There's going to be no tax in terms of sales tax because it's a service item This then will increase accounts receivable and the other side will go to the revenue account assigned by the invoice So if I save and close that then I can see on the balance sheet if I go into the balance sheet Accounts receivable should go up by the $800 there it is there The other side going to the income statement closing this out income statement or profit and loss goes into the service revenue and there's the $800 So closing that out also note when I entered the time when I went down here and said use weekly time and type in say Erica I just use the default date which is currently this week here so you might want to go in here and basically adjust the date range if you're working in real time But just keep that in mind as well okay I'm going to close this back out before invoicing the second job we're going to add another billable item We're going to do so with the writing of the check note you can use the right check form or the enter bills form to do this kind of billable item So when we saw the entering of the time we're thinking about possibly staff or our own time that we then want to use to be populating the invoice This time we're thinking about expenses that we are expending for so if we're working on a particular job we might have had auto expenses We might have bought supplies and so on as we purchase those items with a check form or a bill form we might market off as billable So that we can then use those items to populate the invoice and charge the client for them Now there's a little bit more of a trick with this billable item it's a little not quite as effective because usually it's the items that drive the invoice that we have here Or the creation of the sales receipts so when we use a billable thing and don't have an item assigned to it it causes a bit of a problem let's see what that looks like here So we're going to say alright let's say we're writing a check as of 013023 to Office Depot Office Depot check and we're going to say this notice it memorized the last transaction which went to furniture and fixture but this time we're only buying 160 and it's going to be going to supplies So I'm going to type in supplies, office supplies and expense account And then I'm going to say I bought these office supplies specifically for a job that I'm doing for job 4002 for Smith guitars So now I want to make it billable I'm going to click it off as billable so it's still a check it's still going to decrease the checking account The other side is going to go to office expenses but by assigning a customer here and making it billable that's going to link it to the invoice So when I create the invoice it's going to ask me if I want to feed in or pull in this item of the 0130 that's great I love that But there's a problem in that this billable thing isn't really an item so QuickBooks doesn't really know which account it should be hitting with it And if we don't make any changes it might actually decrease the supplies account Let me show you that in the edit drop down in the preferences and if we go down to the time and tracking I'm going to go to the company preferences and I believe when we went through this we ticked off this item that says track reimbursed expenses as income I do not believe that's ticked off by default I think it's off by default which means that it's going to make a reimbursement of the expense So let's first take a look at what happens when we leave it there I'm going to say okay Alright and then I'm going to say save it and close it so save and close this item and there it is if I go to the if I go to the balance sheet now Double click on the checking account we've got this item from office depot for 0130 there that looks good And then the other side is going to go to the profit and loss for the supplies double clicking on the supplies I should have changed the memo it kept the memo in there but I'm going to say double click on this item let's say couch let's get rid of the couch that's disturbing me But there it is I'll say save and close okay And now let's say we're going to go back to our homepage here and say I want to bill now for both the time that has been entered as well as this check that was entered for that particular job that we made billable So if I do that I'm going to say create invoice and we're going to say this is 4002 the job tab it says hey there's billable items I'm paraphrasing I'm going to say okay that's great We've got the time so I'm going to check off the time that should pull in great because we have the item that's going to pull in we also have the expenses here I'm going to check that one there's the office expenses I'm going to say okay and then we've got the 930 that we're going to charge the customer Now note as we pull in this this second item we probably would want to pull in a description and whatnot of what you know what we have here this would be supplies that we purchased for example as we populate it But it's nice that it pulled in that information we also could have a markup when we pull this information in in our edit preferences down here We might want to say as we pull that in we want a default markup that's what we paid for when maybe we markup each line item 30% or something like that and mark that to a markup account Or we might just say I'm going to take the full billable items that we have here and mark it up to you know whatever the markup is meaning you might put this at cost And then have another line which would be your markup your profits you're making But that's that's it the problem with this is it's going to increase the accounts receivable by the 930 then this one's going to go to the proper income account But I believe this one is going to be a reimbursement of the expense decrease in the expense instead of going to revenue that's generally a problem that's usually not what we want to do Let's save it and close it and check it out and so I'm not going to invoice this so let's save it and close it If we go to the balance sheet double click on the accounts receivable we've got the 930 there that looks good and then I'm going to close this out And I'm going to go into the profit and loss and then we've got the revenue up top in the service revenue there's the service revenue of the $800 that looks good The other 100 and the other amount is not in here of the 130 closing that out and I believe they put that down here into the office supplies netting it out against the office supplies That's not normally what we want to do if I close this back out because usually you're doing this for taxes and usually what you want to say even though you used the office supplies to bill the client Your net income then should take into consideration the fact of the office supplies but normally you want to show the revenue as the total up top even though you had expenses right and then show the expenses it should be revenue minus expenses We shouldn't have negative expense accounts typically so that's that's going to be part of the problem now we can adjust the setting on that a few different ways we can try to set up items Or we can have we can say we want to assign the expense accounts to an income account so one way you can deal with that I'm going to go back to the homepage and we're going to try this again and we'll write another check and do this process again One way you can deal with that you can go to the edit dropdown you can go to preferences you can go to the time and expenses and company preferences and you could say I want to track reimbursed expenses as income But that still gives you some limitations because it's going to assign it to one income account but that's probably the easiest thing to do and you want to make sure that you are aware of that Test it out so that you that you are assigning it to an income account and not a reimbursed expense account because that can cause kind of problems so that's one thing you can do I'm going to say okay the next thing you can do is use items So you can actually get an item in there being lists the chart of accounts I mean the item list if we can use an item then we have control over which income account we want to put in place so this takes a little bit more to do the data input but it gives you a little bit more control So we could say okay let's try this again I'm going to use items this time so I'm going to tap through this I'm going to say this happened on 130 that's fine we'll say this is for office depot And we're going to say this time it was for the amount of let's say 200 this time and then down here I'm not going to put it into the supplies but instead I'm going to try to create an item for it So I'm going to go to the items tab which is usually used with inventory I'm going to create a new item new item up top and I'm going to say it's a non inventory part let's say And I'm going to say that the item name I'm going to call it office supplies just to give an idea of what we can do I'm going to say that this is the key component I'm going to say this item is used in assemblies when I do that it gives me that two sided component which is generally used when we have inventory parts that we're tracking the inventory And that allows me to assign a cost item over here as well as a sales price because we have two sides to the transaction we're entering here on the check side this is when I want it to be hitting an expense account not cost a good soul because it's not inventory but rather supplies or office supplies And then I'm not going to put an amount up top because the amount could change so I'll keep that at zero I don't need a preferred vendor because I might use this for multiple different vendors and then I can call it here on the description office supplies which is great because that'll populate in my description down here And it'll also populate on the sales side when I make the invoice giving me some more control on what's going to be showing on the invoice. I'm not going to put a sales price because it will be dependent on what we put in for the cost. I'm going to say it's non taxable because it's a service item not subject to taxation. The income account now I can assign whatever income account I want to assign it to I'm just going to choose service revenue here but notice how you have now control over whatever you want to be putting it on to an income account. So I'm going to say OK. And so there we have it. And then I'm going to say the amount is to will say 200. You have changed the cost for certain. Do you want to update. No I don't want to update the cost quantity. I'll just say one 200. And then it's going to go to customer customer three oh oh five three oh oh five. And so now I can pull that in. I'm going to make it billable now which should still give me the reference or the or the pop up saying hey you got a billable item. So this is going to do the same thing is just a check. It's but the check is now be driven by an item so the check means it's going to decrease the checking account and then it's going to be in the items area because we needed the item to help me pull it over when I pull it over into the invoice. It's going to be office supplies is the item the item is telling QuickBooks to expense it because we're on the expense side of things under the account of office supplies. So I'll save it and close it. And so if I go back to the to the balance sheet double click on the checking account. We should have the 200 decreasing the office supplies. I'm in the checking account and the other side going to the P and L profit and loss for office supplies again. There's the 200. Now we're going to bill for that one and see if it does what we want charging it to an income account. Not an decrease to an expense account and allowing us to assign which account we're going to hit with it. So this is going to be for the job number 3005 tab. It's saying hey you've got this item. I'm going to say OK that's great. Notice the item is not under the expenses here this time because we did it. We used an item which is usually an inventory item. But we use the items in order to give us more control over basically the expenses that we're pulling over to here now. So I'm going to say OK. So there is our items. So now we're going to say this happened on 130. We'll keep that. There it is. The item is now in place. And now that second half of the item told is going to tell us what income account it wants to go to. And that's going to be our service revenue. So it's not taxable driven by the item. This is going to increase accounts receivable. The other side going to the income account as opposed to a decrease in the expense account. Let's save it and close it and check it out again. I'm not emailing it. I'm not emailing it. This is a practice problem. Balance sheet up top. We can double check on double click on the accounts receivable. And this time we've got the 3005 for the 200. There it is. The other side then going to the whole the profit and loss. And it went into we drove it to the service item. And there's the 200 as opposed to it being a negative expense. So the moral of the story here is that the billable component can be quite useful. But you still want to use the items when you can if you want more control. When you enter the time you typically have an item that you're going to be putting in place with the time which could be an item driven by that's that's geared to the actual individuals time that you're charging how much you charge for that individual time or to the thing that you're doing invoicing for taxes versus bookkeeping. But when you enter the expenses that are billable here when you actually pay for something that you want to then include on the invoice in some way you can turn on the billable items here but you want to be very careful to make sure that you have it the way you want it. You can you can try to have it go to an income account by changing the settings but then you still don't have as much control over which income account and then you could use this items method which gives you a bit more control to pull it over to the accounts that you want. The items are the things that are going to give you a bit more control generally. All right let's go to the reports drop down go to the accounting and taxes trial balance and just see where we are see where we stand 010123 to 123123. Let's customize it and fonts and numbers and pick it on up to 16. We could check our numbers here. If everything lines up great if not change the date range see if it's a date issue if it is then you can drill down on the data to figure it out and we'll be looking at at the end of the month which is coming up shortly the transaction detail report to hone down on any other issues that might be present.