CHAPTER 18- Estimating
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18.1- Creating a Job:
Project-based businesses that want to track income and expenses for customer projects can use the
“Jobs” feature within QuickBooks to do this. You can create a job for a customer in the “Customers & Jobs”
list. To do this, open the “Customer Center” window and then select the name of the customer for whom you want to make a job within the “Customers & Jobs” list. Then click the “New Customer & Job” button in the upper-left corner of the Customer Center and choose the “Add Job” command from the drop-down to open the “New Job” window. This window is just like the “New Customer” window, except that the first three tabs in the “New Job” window will already be filled-in with the selected customer’s information. All you will need to do is enter a name for the job into the “Job Name” field at the top of the window and then click the “Job Info” tab to enter the specific job information. On this tab, you can enter a longer description for the job into the “Job Description” field. You can then enter the type of job into the “Job Type” field, or choose a previous entry made within this field from the drop-down menu. This field can help you categorize the types of projects you perform for customers. You can use its values as a report filter so that you can see income and expense by job type. You can then select the status of the job from the “Job Status” drop-down field. Be sure to update the value within this field as the project progresses. When the job starts, you can enter the start date into the “Start Date” field. You can then enter the best estimate as to when the job will be completed into the “Projected End Date” field. When the project finally finishes, enter its actual end date into the “End Date” field. When you are finished, click the “OK” button to add the job to the “Customers & Jobs”
list. Note that the “Jobs” for the “Customers” appear as “subaccount” entries within this list.
Once you have created a job for a customer, you can then track income and expenses for the
An estimate is a preliminary sales proposal that is often created for a customer’s job. You can create multiple estimates for each customer or each job. If the customer accepts an estimate, you can create an invoice from the estimate, changing it as needed. QuickBooks allows you to create invoices from estimates either by transferring the entire estimate amount to an invoice or by billing only a portion or percentage of the estimate amount over several invoices. The ability to bill for only a percentage of the estimate or for various amounts of selected items in an estimate is called progress invoicing or partial billing.
If you have a job for which you want to create an estimate, select “Customers| Create Estimates”
from the Menu Bar to open the “Estimates” window. Creating an estimate is very much like creating an invoice, except that the amounts entered into the “Estimate” form do not affect any posting accounts within the Chart of Accounts.
Within the “Estimates” window, select the name of the job for which you are creating the estimate from the “Customer:Job” drop-down menu. Note that you can create estimates for customers without jobs,
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Estimating
18.4- Invoicing from an Estimate:
Once you have created an estimate and the customer has approved it, you can use the estimate to invoice the customer. You can either send them an invoice for the entire amount or you can send out several invoices for smaller portions of the estimated amount. This is called progress invoicing. Progress invoicing, which is sometimes called progress billing or partial billing, allows you to invoice for jobs that you work on and complete in phases. When using progress invoicing, you start by creating an estimate for the total job. Then as you complete each phase within the job, you transfer items from the original estimate to an invoice. You can specify which items to include on each invoice and change the estimated amounts or percentages of each item. When you use estimates to create progress invoices, you can run reports to help you compare your estimated cost and revenue to your actual cost and revenue.
To create an invoice from an estimate, open the “Create Invoices” window by selecting “Customers|
Create Invoices” from the Menu Bar. Then select the job for which you have created an estimate from the
“Customer:Job” drop-down field.
At that point, QuickBooks will automatically display the “Available Estimates” window, which shows all of the available estimates for the selected job. Select the estimate from which you want to create the invoice. Then click the “OK” button to continue.
In the “Create Progress Invoice Based on Estimate” window that then appears, select the option button for the invoicing option that you want to use for the invoice. You can select either “Create invoice for the entire estimate (100%),” “Create invoice for a percentage of the entire estimate,” or “Create invoice for selected items or for different percentages of each item.” If you select the first option, then click the “OK”
button to transfer all of the items from the estimate to the invoice. If you select the second option, then enter the percentage of the total estimate to place into the current invoice by typing the percentage to bill into the
“% of estimate” field. Then click the “OK” button to transfer the selected percentage of all amounts within the estimate to the invoice window. If you select the third option, then click the “OK” button to open the “Specify Invoice Amounts for Items on Estimate” window.
In this window you will see all of the items listed from the estimate. You can then enter the amounts or percentage of each item to transfer to the invoice by entering the desired percentages, rates, and quantities into the columns shown. Ensure that the “Show Quantity and Rate” and “Show Percentage”
checkboxes are checked to enable the display of those columns, if desired. Once you have entered the 18.3- Duplicating Estimates:
You can create multiple estimates for the same job, if needed. Perhaps you have a client that needs a couple of different pricing options for a job, and thus needs multiple estimates for the same job. With QuickBooks, you can easily duplicate and modify an estimate to save time. If you make a copy of an estimate and then make modifications to the copy, as needed, you’ll probably save some typing time. To do this, first display the estimate that you want to duplicate within the “Estimates” window. Then select “Edit|
Duplicate Estimate” from the Menu Bar to duplicate the estimate. You should see the next highest estimate number appear within the “Estimate #” field. You can then edit the details of the estimate, as needed, by changing the information in the line item area of the new estimate. Be sure to save the new estimate that you create when you are finished by clicking either the “Save & Close” or “Save & New” button.
Note that if you did not want create the second estimate by duplicating an existing estimate, you can always just create a new estimate for the same job, as well. Also, if you choose to duplicate an estimate you should be careful when you select this command from the Menu Bar, as it is located right next to the “Delete Estimate” command in the drop-down menu.
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18.4- Invoicing from an Estimate- (cont’d.):
amounts for the items you want to transfer to the invoice, click the “OK” button. Note that all of the items will transfer to the invoice, but you can set zero amount line items to not print, if desired, by changing the settings within the “Jobs and Estimates” category within the “Preferences” dialog box in QuickBooks.
At that point, you will then see the items that you want to bill displayed within the “Create Invoices”
window. You can then double-check and change any information needed within the invoice. After you have done that, click either the “Save & Close” or “Save & New” buttons to finish.
18.5- Updating Job Statuses:
Each time the status of a job changes, you should update its status in the “Customers & Jobs” list within the “Customer Center” window. For instance, if you began work on a job that was labeled “Pending,”
you should update the information for the job to reflect the fact that you have started work on it.
You can update a job status by double-clicking on the job entry within in the “Customers & Jobs” list or by selecting the job within this list and then selecting “Edit| Edit Customer:Job” from the Menu Bar to open the “Edit Job” window. Within this window, select the “Job Info” tab. Then use the “Job Status” drop-down to change the job’s status. When finished, click the “OK” button to save your changes.
18.6- Inactivating Estimates:
Once you have a customer with multiple outstanding estimates for a job that accepts one of the estimates, you should make any other estimates for that job inactive. When you make an estimate inactive, QuickBooks keeps a record of it but removes its value from the total estimated amount for the selected job.
To inactivate the estimate, you need to display the estimate you want to inactivate within the
“Estimates” window. One way to do this is to use the “Find” feature within the “Estimates” window. Another way to find the estimate is to open the “Customer Center” and then select the desired job for which you have created the estimate. You should then see the estimates for the job displayed on the “Transactions”
tab at the bottom of the right side of the “Customer Center.” You can select the desired estimate to inactivate within this list and then click the “Manage Transactions” button at the bottom of the “Transactions”
tab. Then choose the “Edit Selected Transaction” command from the pop-up menu that appears to open the selected estimate in the “Estimates” window.
With the estimate that you want to inactivate displayed within the “Estimates” window, click the
“Mark As Inactive” button within the “Main” tab of the Ribbon at the top of the window. Then click the “Save
& Close” button to save your changes and close the window.
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18.7- Making Purchases for a Job:
You can assign purchases that you make to a specific customer or job, so that you can bill for the costs later. To do this, simply use the drop-down within the “Customer:Job” column that appears in the line item area within forms such as the “Enter Bills” window to select the name of the customer:job that you will be billing for the purchase as you create a bill in the “Enter Bills” window.
Notice that this column appears in almost every type of transaction form within the line items area, from the “Create Purchase Orders” and “Enter Bills” windows to the “Write Checks” and “Enter Credit Card Charges” window. You use the “Customer:Job” column to assign line item amounts to a customer:job for future billing or to simply record job costing amounts.
For the line items entered into many forms, if you want to bill the customer for the costs later then ensure that there is a checkmark within the “Billable?” column within the same line item area for each line item that you want to bill back to the customer. If you wish to make the line item non-billable to simply record the job costing information but not be able to bill the cost, then simply click the checkbox for that line item to remove the check from the checkbox. You can then save and close the form.
18.8- Invoicing for Job Costs:
If you assign job costs that you incur to the correct customer:job, then the next time that you create an invoice for that customer:job, you can bill for the job costs. To do this, create an invoice by selecting
“Customers| Create Invoices” from the Menu Bar. Then use the “Customer:Job” drop-down to select the customer:job to which you have assigned job costs.
When you do this, QuickBooks will then display the “Billable Time/Costs” window. To bill the costs, click the “Select the outstanding billable time and costs to add to this invoice?” option button and then click the “OK” button to continue and open the “Choose Billable Time and Costs” window. Note that even if you select not to bill the time and costs at this moment, you can later click the “Add Time/Costs” button that appears within the “Main” tab of the Ribbon at the top of the invoice to open the “Choose Billable Time and Costs” window.
In the “Choose Billable Time and Costs” window, click the “Expenses” and “Items” tabs, as needed, to display the outstanding expenses recorded and items purchased for the selected customer:job. Select the expenses to bill to the customer by clicking the leftmost column next to each line item to mark it with a checkmark. On the “Expenses” tab, you can even markup expenses if needed, by entering the amount or percentage to mark up the items into the “Markup Amount or %” field. Note that if you mark up the selected items by a percentage, then you must enter the percent sign into this field, otherwise QuickBooks will assume it is an amount. If you mark up expenses, select the income account to which you attribute the markup by selecting it from the “Markup Account” drop-down. If the selected expenses are taxable, check the “Selected expenses are taxable” checkbox. In both tabs, you can check the “Print selected time and costs as one item” checkbox to add all of the billable time and costs to the invoice as a single item, if needed. Once you have checked the billable items and expenses, click the “OK” button to add them to the invoice. You can then complete and save the invoice as you normally would, and close the “Create
18.9- Using Job Reports:
QuickBooks provides you with various reports that display general job information, job costing information, and estimate information. You can access these reports from the “Reports” menu within the Menu Bar, under the “Jobs, Time & Mileage” report category in QuickBooks Pro. The names of the reports and descriptions of their content are listed below.
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REPORT NAME: DESCRIPTION:
Job Profitability Summary Summarizes the money made from each customer’s job.
Job Profitability Detail Shows the details of how much was made for a single customer’s job.
Job Estimates vs. Actuals Summary Compares estimated cost to actual cost and estimated revenue to actual revenue for all customers and jobs.
Job Estimates vs. Actuals Detail For a selected customer or job, compares estimated costs to actual costs and estimated revenues to actual revenues.
Job Progress Invoices vs. Estimates Compares estimates to the estimate’s progress invoices.
Item Profitability Shows how much money has been made from each item sold.
Item Estimates vs. Actuals For each item, compares estimated cost to actual cost and estimated revenue to actual revenue.
Profit & Loss by Job Shows how much money has been made or lost on each job.
Estimates by Job Lists all estimates by job.
Unbilled Costs by Job Shows all unbilled costs for each customer job.
Open Purchase Orders by Job