Handling Unbilled Charges in QuickBooks Online

Managing unbilled charges and billable expenses is a critical aspect of maintaining accurate financial records, especially for businesses transitioning to QuickBooks Online. Below is a detailed guide to understanding these processes, including actionable steps and additional resources for deeper insights.

What Are Unbilled Charges?

Unbilled charges are transactions or activities planned to be invoiced to a customer but have not yet been included on a saved invoice. These can include:

• Charges: Fees for goods or services.
• Credits: Discounts or adjustments to be applied later.
• Billable Expenses: Costs incurred on behalf of a customer.
• Time Charges: Billable hours tracked for a project or service.

Steps to Manage Unbilled Charges:

1. Set Up Recurring Invoices: Automate the process by creating recurring invoices that include unbilled charges. This is useful for businesses that occasionally bill customers for additional charges outside regular billing.
2. Track Non-Posting Transactions: Keep in mind that unbilled charges are non-posting transactions. They won’t appear in report totals or affect account balances until invoiced.

For more details, visit the QuickBooks Help Guide on Unbilled Charges.

Reimbursable Expenses in QuickBooks Online

Reimbursable expenses, also known as billable expenses, are costs incurred on behalf of a customer and later invoiced. In QuickBooks Online, these are managed slightly differently than in QuickBooks Desktop.

Steps to Handle Reimbursable Expenses:

1. During Migration from QuickBooks Desktop:

   • Reimbursable expenses and unbilled time transfer as billable expenses in QuickBooks Online.
   • In QuickBooks Online, specify the markup percentage when creating the purchase instead of on the invoice.
   • Note: This feature is only available in QuickBooks Online Plus and Advanced. If you migrate to Simple Start or Essentials, you won’t be able to modify these transactions directly.

2. Remove a Billable Expense:

   • Sign in to QuickBooks Online.
   • Navigate to Sales > All Sales > Unbilled Activity.
   • Select the customer and locate the billable expense.
   • Open the transaction, uncheck the Billable box, and save.
     For more details, refer to the QuickBooks Guide on Removing Billable Expenses.

3. Hide Unbilled Expenses in Bulk:

   • Visit the Manage Billable Expenses Tool.
   • Enter a date to mark unbilled expenses created before that date as closed.
   • Save changes.

Challenges During Migration from QuickBooks Desktop

Migrating to QuickBooks Online can be challenging, especially with unbilled charges and billable expenses. For instance, during migration, every journal entry, deposit, and transaction marked as billable can create inflated unbilled income amounts. This issue is manageable for small datasets but can become overwhelming for larger companies.

Steps to Address Migration Challenges:

1. Use the Manage Billable Expenses Tool: While helpful, this tool may encounter issues if inactive items exist in the system.
2. Bulk Data Management:
   • Use tools like Saasant to edit transactions in bulk. Export data via reports like "Unbilled Costs by Job," adjust in Excel, and re-upload for accurate billable statuses.
   • Ensure all inactive elements in QuickBooks are reactivated before migration.

For a smoother migration process, check out the QuickBooks Online Practice Guide.

Streamlining Data Management

Efficient management of unbilled charges and billable expenses requires careful planning and leveraging the right tools.

Steps for Streamlined Management:

1. Prepare Data Before Migration:
   • Review and clean up data to ensure accuracy, especially for billable expenses and inactive elements.
2. Automate Recurring Invoices:
   • Set invoices to automatically include unbilled charges, saving time and reducing errors.
3. Collaborate with Clients:
   • Work closely with clients to ensure reports meet their specific needs, especially for industries like construction where job costing is critical.

Key Takeaways

Managing unbilled charges and billable expenses in QuickBooks Online involves understanding their nuances and leveraging available tools for efficiency. By following these steps:

• Automate processes like recurring invoices and bulk data adjustments.
• Use tools like Saasant (Desktop or Online) for transaction management.
• Plan and review data thoroughly before migration to avoid errors.

For more information on managing QuickBooks Online, refer to these resources:

 Our recent workshop on this subject.

• QuickBooks Help Guide on Unbilled Charges
• Removing Billable Expenses Guide
• Manage Billable Expenses Tool

With these insights and strategies, businesses can streamline their financial processes and focus on growth