QuickBooks Online for Contractors

In This QuickBooks Online Training Video, you will learn about account settings and how they effect your usage of QuickBooks Online. Settings are the: “options”, “defaults” or “preferences” that make the QuickBooks Online Plus account behave the way you need it to as a contractor. We will adjust the specific settings that contractors would need. This will activate features that were not activated before the settings were changed and we need several of these as contractors.

In This QuickBooks Online tutorial lesson, you will learn how to customize and save the most important contractors reports from that QuickBooks Online makes available for contractors. These are reports that help contractors manage jobs from start to finish. After customizing them to fit the way a contractor would need, you will “save customization” so you can quickly access these reports from the “custom reports” tab. Then you can see each phase and area of job information. The reports that you will customize in this QuickBooks training video are: The Trial balance, Estimates and Invoicing Progress by customer, Open Invoice, transaction list by customer, profit and loss by customer, unbilled charges, unbilled time activities and uninvoiced time.

In This QuickBooks Online tutorial lesson, you will learn how to input customer and vendor information such as their name, address, phone number and email into Quickbooks Online. You will need to choose customer and vendor names from drop down menus later in this course.

In This QuickBooks Online tutorial lesson, you will learn about the projects window. The Projects window in QuickBooks Online is a window that puts together everything you need for your projects all in one place. It gives you the ability to separate the income and expenses per project if they're under the same client. This way, you can run reports that show the profitability of only the individual jobs without mixing them together under the same client and find out how much a specific project is actually making.

In This QuickBooks Online tutorial lesson, you will learn about the chart of accounts that a professional contractor would need. QuickBooks Online plus version already comes with a chart of accounts. You can modify the accounts in the account list to add, edit or remove any account. You can make accounts inactive and change the account type. Account type in QuickBooks Online will be explained here. There is a small discussion of “detail type”, but that is usually not relevant to how the account will behave.

In This QuickBooks Online tutorial lesson, you will learn how to manage the ‘items list” This is the list of products and services that you technically “sell” to your clients when you make a contract and execute the contract over time. These services are “connected” to an income account so that when you list these services on an invoice, the proper income account increases, and you can track your income from the different services and products that you sell to your clients. These items are listed on the job estimate and then copied to each invoice as the work is completed over time.

In this QuickBooks Online contractor training class, you will learn how to record job estimates in QuickBooks Online. These estimates are documents you make that reflect the specific services that you will perform for your client during the life of the contract. It will list the items on the products and services list that we set up in a prior video. The money amount of the estimate total should be the same as the total of the signed contract. You will make invoices from this estimate as the “base” of the progress percent complete. To check the progress of the main job contract estimate against the invoices that you billed to the client during the contract, you should check the report called “Estimates And Progress invoicing summary by customer” report. Please note, estimates are not technically transactions, they are simply documents that record the details of the contract event and help you track the percent complete of a contract based on the invoices that have been applied to the estimate.

In this QuickBooks Online contractor Video lesson, you will learn how to record invoices to bill the clients for work done on the jobs we do. The invoice is taken as a part of the estimate that we created in the prior video. By making the invoice in this way, we are able to see the progress of the job completion as well as making sure that the same items on the invoice are on the original estimate. These invoices will cause the client’s balance to increase and also record income earned in the chart of accounts and show on the trial balance. The report that shows the progress of the jobs based on the recorded invoices is the “Estimates And progress Invoicing Summary By Customer”. The best report to show the client’s balance as well as the remainder of each unpaid invoice is the open invoice report.

In this QuickBooks Online contractor training tutorial, you will learn how to record payments that you receive from clients for the job-related invoices that you have already billed them for. Usually payments from clients are applied to the oldest invoices first. They will decrease the balance of the client’s money owed for a job. The best report to see the invoices and the balance of the client is the open invoice report. This will sow the remaining amount unpaid of any invoice that the client has not paid. However, you can see all transactions in date order of any client by using the “transaction list by customer” report.

In this QuickBooks Online contractor instructional lesson, we will discuss the options on how to record advanced payments, pre-payments and job deposits on contracts. There are 2 main methods. There’s the “credit memo” method and the “Job deposit” method. Each method has good and bad attributes and this video explains the “pros” and “cons” of both methods and gives you an overview of what happens when you use them. You will set up estimates and jobs to prepare for both methods in upcoming videos.

In this QuickBooks Online contractor video class, you will learn how to use the invoice deposit feature. This feature gives you the ability to record a job deposit received from a client when you record your fist job invoice for the project. This feature must be activated in the account settings window. It will add a field to the invoice window specifically for the amount of the deposit received from the client at the moment you create the invoice. Usually, this feature is used when there is only 1 job invoice for the whole client project. The important thing to note, is that your income accounts, receivable account and client’s balance will not be accurate until the job is complete. That’s because you must record the invoice, which increases income accounts and customer’s receivable accounts, before you start work on the job. The numbers all become correct when the work on the job is done. You would then re-print the invoice and give it to the client to request final payment from your customer.

In this QuickBooks Online contractor training tutorial, you will learn how to track income and expenses by job. Income by job is tracked as invoices are made for clients and specific jobs. However, in order to track expenses by job to determine profit for each job, you must make sure that you put the name of the client’s job in the “customer” field of the check, expense or bill. I order to have the “customer” field appear in these 3 transaction types, you must activate “track expenses by job” in the account settings window the way that we did in the set-up video when we learned about account settings. The most important report that shows the income, expenses and profit for each job is the “profit and loss by customer” report.

In this QuickBooks Online contractor training tutorial, you will learn how to use the budget by job feature. It remembers the amounts of each expense or other accounts that you input into the data sheet as the budgeted amounts. Then, after putting in the budgeted amounts, simply run the report called budget versus actual and you will see all the differences between the budgeted amounts and the actual transactions. The most important thing you need to know about running budgets is that you can change any budgeted amount or any actual transaction amount at any time, and the budget versus actual report will reflect the change immediately.

In this QuickBooks Online contractor training class, you will learn how to track income from billable expenses. When clients reimburse you, you could track this money as income. If you do, QuickBooks online by default, will track income from this client’s reimbursement from a default income account called “billable expense income”. However, if you want to track this billable expense income in to a different income account, you must create the income accounts you want to use and then change the defaults and settings in the account settings or company settings window. If the options in the settings window are changed to “in multiple accounts” then you can record the reimbursement transaction the same way you did in the prior video. You must re-open the new income account that you created and tell QuickBooks online which income account the income will be tracked in when billing the client for that specific expense. The report that will show before billing is the “unbilled expense” report until the item is placed on an invoice. Then, it will show up in the “profit and loss by customer” report in the income account you chose.

In this QuickBooks Online contractor video tutorial, you will learn how to make billable expenses become a reduction of your own expense at the moment you bill the client for the job cost that you paid for. If you pay for a job cost or expense, then at that moment that is YOUR expense or cost. However, if the client then reimburses you, at that moment, you no longer have that expense, the client does because you have increased their balance and added it to a job invoice. Therefore, at the moment you bill the client, you expenses go down for the amount that you just billed the client for. You can make this happen if you change the default settings in the account settings or company settings window.

In this QuickBooks Online contractor instructional class, you will learn how to bill clients for specific items and expenses that the customer has agreed to pay for upon signing the job’s contract. It is common for clients to agree to pay the contractor’s fee along with project related expenses. The way to add these expenses and costs to the job-related invoices is to mark them as “billable” to the customer or job that you add to the customer field on a check, bill or expense type of transaction. We learned how to add the customer or job to these transactions in the prior video. We will do the same thing here and add 1 step; click the checkmark in the billable box next to the customer’s name. This will allow us to see the transaction we marked as billable in the right panel whenever wo go to make another invoice for that customer’s job. Then, we can just add the transaction to the invoice and the client can see the exact transaction they are getting billed for. If you record an expense type of transaction marked as billable, it will immediately show on the unbilled cost reports. It will stay there until placed on an invoice. The only way that any of this is possible would be if, at the beginning, you changed the account settings to activate the billable option feature.

In this QuickBooks Online contractor training class, you will learn how to track income from billable expenses. When clients reimburse you, you could track this money as income. If you do, QuickBooks online by default, will track income from this client’s reimbursement from a default income account called “billable expense income”. However, if you want to track this billable expense income in to a different income account, you must create the income accounts you want to use and then change the defaults and settings in the account settings or company settings window. If the options in the settings window are changed to “in multiple accounts” then you can record the reimbursement transaction the same way you did in the prior video. You must re-open the new income account that you created and tell QuickBooks online which income account the income will be tracked in when billing the client for that specific expense. The report that will show before billing is the “unbilled expense” report until the item is placed on an invoice. Then, it will show up in the “profit and loss by customer” report in the income account you chose.

In this QuickBooks Online contractor training class, you will learn how to resolve billing issues by using the description field. When you record any check expense or bill, you have to make extensive use of the description field because the description field is the only field of information that actually flows through from the expense to the final invoice that you place the expense on. It allows us to find a bill if we're looking at an invoice and find the corresponding invoice if we're looking at a bill. Always put something in the description field of the expense or check that is somewhat unique, that identifies what the expense was for.

In this QuickBooks Online contractor training class, you will learn how to track changes to the original contract between you and your client. Usually, these changes would go on a document called a “change order”. In QuickBooks online, contractors do not have a separate document for changes to the original contract. Instead, these changes are automatically documented by QuickBooks online as you edit the original job estimate. To see these changes, you open the estimate and view the “audit history” for the estimate. It will show the changes and the details of the changes and you can make a “screen shot” or print them

Expense Items in QuickBooks Online, are items that get input into the QuickBooks Online list of products and services. Prior contractor items on this list were only “connected” to an income account. However, QuickBooks online allows you to make special items on this list to connect to both an income and expense account. We call this a “2-sided item” on the list of products and services. The reason for this special items type, is to be able to give more details to the client when billing them for reimbursable job expenses. The additional difference between this method of client billables and the prior methods shown, is that this is not affected by any settings in the account settings window. In other words, in the prior billing method, either income would increase OR expenses would decrease at the moment you would bill for an item that you previously purchased for that job. However, if you use expense items, and in this case 2-sided expense items, then when you bill, the income account goes up no matter what you put as the preferences and the accounts settings window.

If your clients require billing with the format from the American Architect Institute, then you must match the billed item categories to the items list in your QuickBooks records. When contract details specify the work to be done, the items listed in the contract are service types and it is the sub-description that explains exactly what work is to be done and how to measure for progress invoicing. After each job phase, the next percent complete will be billed on an a.i.a. document and the item details will be on a spreadsheet like document called the “schedule of values”. It is this part that breaks down each new amount of work in each job phase that is being billed for.

In this QuickBooks Online contractor video tutorial, you will learn how to track retention (retainage). This is a small amount withheld by the client from each invoice; usually about 5 or 10 percent of each invoice. The remaining amount or retention withheld from each invoice will be paid after the client verified that they are satisfied with the work. The retention is owed from the client to you until the work is done and the retention is paid. This training video will show you how to track the accumulated retention for all your clients and always know how much is owed to you by all clients for retention payments at the end of each job.