Pass-Throughs Chapter 1

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 2 Objectives What makes an expense Billable, Not Billable, or Billed How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers How to add reimbursable Expenses, Items, Mileage, and Time to Invoices How to use two-sided Items to track reimbursable expenses How to use two-sided Items to track custom ordered items 1

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 3 Objectives (Cont.) How to use two-sided Items to track subcontracted services How to use the Unbilled Costs by Job Report How to use the Time by Job Report How to use the Vehicle Mileage Tracker in QuickBooks How to handle Multiple Pass-Throughs on a single Invoice 1

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 4 Billable Expense transactions involving Expenses, Items, Mileage and Time You can use Enter Bill or Write Checks window to enter the expense To make it billable to customer –Enter a Customer or Job name in Customer:Job field –The invoice icon shows that the expense is billable –Save and Close 2

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 5 Reimbursable (Billable) Expenses QuickBooks allows you to pass expenses through to customers for reimbursement To track a reimbursable cost, you’ll first need to record the expense Then you create an invoice for the customer, to pass the cost If you assign expenses to jobs, but do not intend to pass them through for reimbursement, –Click the invoice icon so that it has a red X through it –This makes the line item “Non Billable” 2

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 6 Adding reimbursable Expenses, Items, Mileage, and Time to Invoices Open the Create Invoices window –Enter the Customer or Job name in the Customer:Job field, a message appears to remind you that this job has expenses that you designated as billable –Click Time/Costs icon to display the reimbursable expenses for this Customer –Use appropriate tabs to see reimbursable Items, Expenses, Time, and Mileage that have accumulated –Click in the Use column to select this expense for reimbursement, this will cause the expense plus the markup (if any) to show on the Invoice –Save and close invoice 4

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 7 Sales & Customers Preferences for Reimbursable Accounts To track reimbursable expenses in one account and the reimbursements in another account, set the Sales & Customers Company Preferences : –Set the default markup for your reimbursable expenses and Inventory Items –When Track Reimbursed income as expenses box is checked, you can associate income accounts with expense accounts, so that when you pass an expense through to an Invoice QuickBooks will increase the associated income account –You need to associate each reimbursable expense account with an appropriate income account 9

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 8 Two-Sided Items An Item used on both sales and purchase types of forms is commonly called a “Two-Sided Item” Item setup screen includes purchase information on the left side (Expense Account field) and sales information on the right (Income Account field) Two-sided item can be used on expense forms (e.g. Checks and Bills) and sales forms (e.g. Invoices and Sales Receipts) For two-sided items, you can generate reports showing the profitability of each Item 11

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 9 Using Two-Sided Items (Pro and above only) Possible uses of two-sided Items include: –Reimbursable Expenses –Custom Ordered Parts –Subcontracted Labor –Cost of Goods Sold postings 11

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 10 Two-sided Items to track Reimbursable Expenses You can create two-sided Other Charge Items to designate categories of expenses (e.g. transportation, clerical, or material expenses) Use these Items on both expense transactions and sales forms 11

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 11 Two-sided Non-Inventory Items to track Custom Orders If you sell products that you don’t hold in inventory, you can use QuickBooks Pro’s “two-sided Items” to automatically track the revenue and costs for each Item 12 This is a “two-sided” Item. It allows you to specify a separate account for the costs and the revenue on a single Item setup screen.

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 12 Two-Sided Service Items to Track Subcontracted Labor If you hire subcontractors, you may want to create a two-sided Service Item for each subcontracted service This will allow you to pass subcontractor costs through to Invoices and it will allow you to create reports showing the profitability of your subcontracted services 18

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 13 Unbilled Costs by Job Report This report shows all of the billable expenses and Items that you haven’t passed through to Invoices Select the Reports menu, choose Jobs, Time & Mileage, and then choose Unbilled Costs by Job 21

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 14 Billable Time from Timesheet From the Employee section of the Home page, choose Enter Time drop down icon and then select Use Weekly Timesheet. –On the Timesheet, enter subcontractor’s name in the Name field and click Set Date –As you enter the date, QuickBooks will display a weekly timesheet showing the billable hours 22

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 15 Time by Job Report To see all the customers that need to be invoiced for services, use a Time report such as Time by Job Select the Reports menu, then select Jobs, Time & Mileage, and then select Time by Name Set the date fields Click Modify Report to format the report to display the Billed and Unbilled columns 23

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 16 Invoicing for Billable Time Click Invoice on the Home page Enter customer and job in the Customer:Job field Click Time/Costs to pass billable time through to this Invoice Click the Time tab, click Options to modify how timesheet information is transferred to Invoices Click OK to save the settings in the Options for Transferring Billable Time window From the Choose Billable Time and Costs window, click Select All to use all of the time activity for this customer The timesheet activity you selected on the Choose Billable Time and Costs screen now shows on the Invoice Enter Job information in the Memo field of the Invoice 24

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 17 Vehicle Mileage Tracking (Pro & above) QuickBooks Vehicle Mileage tracker allows you to track vehicle mileage, post mileage to invoices, and run reports for tax preparation To set up mileage tracking, –Create an Other Charge item called Mileage –Select the Company menu and select Enter Vehicle Mileage –Select Add New from the Vehicle drop-down list and enter vehicle name and description to create an item in vehicle list –To set up your mileage rates, click the Mileage Rates button and enter the mileage rate designated by the IRS for the appropriate tax year –Complete the Enter Vehicle Mileage window –Click Save & Close to save your mileage entry 28

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 18 Vehicle Mileage Tracking Reports To create reports about your mileage –Select the Reports menu, then select Jobs, Time & Mileage, and then select Mileage by Vehicle Detail –QuickBooks displays the rate based on the year the miles occurred –It uses the Mileage rates window to look up the rates To see all mileage that has not yet been billed, use a Mileage report such as Mileage by Job Summary –Select the Reports menu, then select Jobs, Time & Mileage, and then select Mileage by Job Summary –Click Modify Report to format the report to display the Billed, Unbilled, and Not Billable columns 31

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 19 Multiple Pass-Throughs on One Invoice From the Home page, click Invoices Select Customer name from the Customer:Job list and click OK to the billable cost reminder Select Time/Costs and click the Mileage tab Select Use on the Mileage, Items, Expense Click OK to post all selected pass-throughs to the invoice Click the Time/Costs button on the invoice to re-display the Billable Time and Costs window. Click the Time Tab and click Select All on the unbilled Expenses Click Print Selected time and costs as one invoice item Click OK to post all of the selected pass-throughs to the Invoice Preview the resulting invoice by choosing Print and Preview 32

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 20 Chapter Review What makes an expense Billable, Not Billable, or Billed How to record transactions involving Expenses, Items, Mileage, and Time that will be billed to your customers How to add reimbursable Expenses, Items, Mileage, and Time to Invoices How to use two-sided Items to track reimbursable expenses How to use two-sided Items to track custom ordered items 37

PAGE REF #CHAPTER 1: PassThroughs SLIDE # 21 Chapter Review (Cont.) How to use two-sided Items to track subcontracted services How to use the Unbilled Costs by Job Report How to use the Time by Job Report How to use the Vehicle Mileage Tracker in QuickBooks How to handle Multiple Pass-Throughs on a single Invoice 37