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Select Employees or Customers, then Enter Time, and select either the Weekly Timesheet or Single Activity as you prefer.
Because it is easier to enter appropriate descriptions in the Time/Enter Single Activity window we recommend using this method. However, the Use Weekly Timesheet window is a good way to review your time for the day or week to make sure you have captured all of your time.
When entering time for an employee the Payroll Item will be filled in based on the Employee information. When entering time for a Vendor, the Payroll Item field will not be visible.
You can use the clock in the bottom to start and stop a timer to track your work in process.
If the work is for a customer, make sure the Billable box is checked. When entering time for Employees this will usually be checked by default. When entering time for a Vendor the Billable box is usually not checked by default.
When using the Weekly Timesheet for entering time you will need a new row for each unique combination of service, payroll item, customer, note, class and billable status. You can customize the starting day of the week through Edit / Preferences / Time & Expenses / Company Preferences.
Setting up Rates
QuickBooks allows for the setup of Billing Rate Levels. This allows you to set custom service item rates for different employees and vendors. Once you create Billing Rate Levels and associate them with employees and vendors, each time you create an invoice with billable time QuickBooks will automatically fill in the correct rate for the service item based on who did the work.
You can find this by selecting Lists and then Billing Rate Level List. They can be set to be a Fixed Hourly Rate or a Custom Hourly Rate per Service Item.
- Use Fixed Hourly Rate when the same rate is charged for all service items performed by people with this Billing Rate Level.
- Use Custom Hourly Rate Per Service Item when different rates will be set for different service items performed by people with this Billing Rate Level.
If you choose a Custom Hourly Rate per Service Item the Billing Rate Level window will let you assign the Billing Rate for each Service Item.
Note that you have the ability to choose specific Service Items and have QuickBooks calculate rates that are a percentage higher or lower than the Standard Rate or the Custom Rate. This can be useful if you are adjusting rates by a specific percentage for the new year.
Once Billing Rate Levels are set they can be assigned to Vendors, Employees or those on the Other Names list. We do not recommend using Other Names as you should be set up to issue 1099s to anyone not an Employee, and you cannot do that with someone on the Other Names list.
For Employees, edit the Employee and select the Additional Information tab to select the Billing Rate Level.
For Vendors, edit the Vendor and click on the Payment Settings tab to set the Billing Rate Level.
When you track time the time information can be used for customer invoices, payroll or both. Billing Rate Levels are used only when invoicing customers, they do not have any impact on Payroll.
Time entered on a Vendor can be used to pay the vendor. It is important that these items be setup as double sided entries.
Entering Expenses
Whether you are writing a check or entering a bill, if the charge will be passed through to the client you should you use an item that is pointing to the Advanced Client Costs account. If this type of item is chosen then the Advanced Client Costs account will be Debited when the expense is entered (on accrual basis
If entering Bills, and you have setup a separate A/P Account for Trust transactions, make sure you use the Operating A/P account.
You can have separate items for different types of Advanced Client Costs, or use a single item and modify the description as needed. Always make sure the Customer:Job is chosen and the Billable box is checked, regardless of whether using Enter Bills or Write Checks.
Invoice Clients for Fees and Expense
Invoices can be created for clients individually or you can generate bills for time and expenses for multiple clients at once. Note that use of the Invoice for Time & Expenses function requires that ALL selected clients use the same Invoice Template and that you do not need to add any additional transactions to the invoice, or make any customizations. While you can edit the invoices after creation If customizations are needed, this step is more likely to be missed so it is preferable to create the invoices individually.
Create invoices for multiple Clients at once
- Select Customers then Invoice for Time & Expenses.
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Set the Date Range and choose the Template, then select the Customer:Job(s).
- On the next screen you can review billables for specific Customer:Jobs. You cannot remove any items that you want to exclude at this point. If you find that something should not be included you must Cancel and restart the process, omitting this Customer:Job or changing the date range.
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You can click Edit Options to edit the options for transferring billables. Note that the options will apply to ALL selected Customer:Job(s).
- When you click Create Invoices the invoices will be created. Remember that if you go back to the invoice and remove a line item it will NOT return to To be Billed status.
Create invoices for Single Client
- Select Customers and then Create Invoices.
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Enter the Customer:Job you wish to invoice. You will be reminded that the customer has Time or Costs available for invoicing. If this message does not appear or you cancel out and then need it, you can click Add Time/Costs and the window will open to allow you to make your choices.
- Select the items you want to bill for. You can choose to have items grouped together. If you desire this you have to choose only the items you want grouped as a single line item, add them to the invoice and then return to the Add Time/Costs window.
- The selected items will be added to the invoice with the appropriate rates.
Notes Regarding Invoices and Rates
There are some important things to recognize in terms of invoices within QuickBooks.
- Employee or Vendor Names will NOT show on the invoice. If you need this you must setup a Class for each Employee/Vendor and use an invoice layout that shows Class, or include the name in the Description.
- Items will be billed at the amount based on the Item Price, the Rate Level for the Employee/Vendor or the Price Level of the Customer.
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Price Levels let you set custom pricing for different customers or jobs. These are created by selecting Lists and the Price Level List. Price Levels are then associated with Customers on the Payment Settings tab.
- Fixed Percentage Price Level – increase or decrease prices of all items for a particular customer or job by a fixed percentage
- Per Item Price Levels – set custom prices for items associated with different customers or jobs
- Price Levels associated with customers are automatically used for billable time and reimbursable items. They are NOT automatically used for reimbursable items and expenses from purchase transactions or invoices created from estimates.
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Both Price Levels and Billing Rate Levels can apply to service items. Whenever a service item is added to an invoice via the Add Time/Costs window, the rate for that service item is determined as follows:
- If the invoice is for a customer or job with a “fixed percentage” price level (such as, the customer always gets a 10% discount), the price level adjustment is applied to the employee’s billing rate. If there is no Billing Rate Level, the price level adjustment is applied to the service item’s standard rate.
- If the invoice is for a customer or job with a “per item” price level (such as, always charge this customer $50 an hour for a particular service and $60 an hour for another service), the customer’s price is always used. A “per item” Price Level overrides both Billing Rate Levels and standard rates.
- If the invoice is for a customer without a Price Level, but there is a Billing Rate Level associated with the employee or vendor who did the work, the Billing Rate Level is used.
- If there is no Price Level or Billing Rate Level then the service item’s standard rate is used.In any case, you can modify the rate directly on the invoice to be whatever you want
- If you add a service item to an invoice directly (not using the Add Time/Costs window), Billing Rate Levels are never used.
- If clients may pay less than the full amount of the invoice at once and you want to control how the payment is applied to fees and costs, you must create separate invoices for fees and costs. QuickBooks allocates partial payment proportionally across the items on the invoice.
- If you wish to bill for soft costs these should be added to the client invoice as individual line items.
- If you need electronic billing or are using a service to track copies for billing, you will need to investigate add-ons to handle this, as it is not possible within QuickBooks by itself.