Lesson 4 of this series introduced some of the common workflows QuickBooks Online (QBO) users follow to track their sales. It also looked at the first of those workflows by examining the use of Sales Receipts within QuickBooks when a business is paid immediately for their products and services. Lesson 5 (last week) looked at the second workflow including the Accounts Receivable cycle along with Invoices and Payments. This lesson looks at the final of the three workflows and examines the use of Estimates and Progress Invoicing.
Creating Estimates
Estimates work exactly like Invoices, but are used for bids before a job starts. Estimates are non-posting, meaning that they allow your company to create a quote for a job, without it being reported as income in the system.
Fill out the Estimate with your Products & Services, quantities, and amounts. Send it to the Customer for approval. When a job is accepted, open the Estimate and use the Copy to Invoice button to copy all the information into an Invoice.
Make any Change Orders or adjustments to the scope of the job in this new Invoice.
PEBCAK! Don’t waste time starting a new Invoice for an accepted bid…convert the Estimate! When it turns into an Invoice, the Estimate closes automatically.
PEBCAK! If your customer doesn’t accept a job, open up the Estimate and mark it as Rejected. Your list of Estimates should be limited to real pending projects.
Progress Invoicing
Progress Invoicing allows you to break large Estimates up into multiple charges. Invoice a customer in stages, either for specific Product and Service line items or for milestone percentages. The Estimate keeps track of the billing status for the job.
Turn on Progress Invoicing in the Sales Settings. When you Copy to Invoice, the option appears to copy the full amount, a percentage of the balance, or specific line items.
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When you reopen the Estimate, you easily see how much of the original Estimate has been fulfilled and how much invoicing is still to come.
The QBO Estimate form illustrating progress invoicing with invoiced amounts and remaining amounts to be invoiced.
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Lesson Wrap-up
Estimates and Progress Invoicing extend QBO’s project management abilities for a complete Accounts Receivable system for businesses of any size.
Progress Invoicing dovetails nicely with QuickBooks Online’s Projects Center and Job Costing. To find out more about these features, please check out my Royalwise video course on this topic. (Use code IA10 for 10% off!)
Join us next time when we will look at Bank Deposits and Undeposited Funds.
Be sure to check out my upcoming webinar with Insightful Accountant. Master the Banking Feed on April 22 and Vendor Workflow in QBO on August 12.