Home Topics Finance Progress accounting in QuickBooks Online: step-by-step instructions

Progress accounting in QuickBooks Online: step-by-step instructions

If you use QuickBooks Online for your Small business accounting needsYou have probably successfully invoiced your customers. However, sometimes an invoice at the end of a project isn’t the best way to get compensation for your work. In this case, QuickBooks’ progress accounting can be the solution. This manual explains the process and explains step by step how to activate and successfully manage progress accounting in QuickBooks Online.

What is Progress Accounting in QuickBooks Online?

In the simplest scenarios, a company is hired on a specific project or assignment, the job is done, and an invoice is sent to the customer, which is then paid. However, not all companies can use this approach. On larger, long-term projects, waiting for the project to complete to receive payment is unsustainable – this could create a serious cash flow problem. This is where progress accounting comes into play.

With progress accounting, also known as progress accounting, a customer is billed gradually after the work has been completed. This way, you will receive multiple partial payments over the entire length of an order instead of one full payment at the end. To send progress invoices, you must first create an estimate and agree it with your customer. QuickBooks progress is billed based on this estimate. You can calculate either a percentage or a specific part of the estimate in each of your progress calculations.

How to enable progress accounting in QuickBooks Online

Before you can start sending progress invoices QuickBooks Onlineyou have to activate this function first. Progress billing is supported in QuickBooks Online Simple Start, Essentials, Plus, and Advanced plans. It is important to note that while Progress Billing is available for all QuickBooks Online plans, this article is specifically about Progress Billing for QuickBooks Plus and Advanced plans.

To activate progress accounting in QuickBooks Online, first navigate to Settings (indicated by the gear icon). Next, select “Account and Settings” and then select the “Sales” tab in the left bar. You will find “Progress Invoicing” in a separate section under “Products and Services”.

Check the box next to “Create multiple partial invoices from a single estimate” and then click the “Save” button. You are now ready to start sending progress invoices from your estimates.

QuickBooks Progress Statement: A Step-by-Step Guide

Before you can begin using QuickBooks’ progress billing, you must first have a billing estimate. As soon as you have agreed pricing terms with your customer and created one Estimation in QuickBooksYou can start with progress accounting.

Step 1: Navigate to the estimate

After your estimate has been created and approved by the customer, the first step in QuickBooks Progress Statement is to select the estimate for which you want to create a progress statement. To find your estimate, click on “Sales”, then click on “All Sales” and find your estimate in the list.

A note on estimates: You may want to enable a “Bundle” item on your estimate if you do not want your customer to see the exact stages of the job for which you have been hired. Bundle items are similar to group items in QuickBooks Desktop and are great when you need to hide details in the customer-facing sales slip.

QuickBooks progress accounting

In this example estimate, the total is $ 3,600. To illustrate the QuickBooks progress bill, we will create a progress bill for 50% of the total estimate.

Step 2: create an invoice

There are two ways to invoice your estimate. If you do not want to open the estimate yourself, you can select the option “Create invoice” in the “Actions” column after you have found the relevant estimate in the list.

When you have opened the cost estimate, you will find the “Create invoice” button in the top right corner of the cost estimate. Choose this button.

QuickBooks progress accounting

Step 3: Select an invoice amount

After selecting the “Create Invoice” button and enabling progress accounting for QuickBooks, a “How much would you like to invoice?” Pop-up window appears. Displayed with three bulleted options.

In this popup, you can either choose the sum of all estimated lines (you would choose this if you don’t want to edit the invoice further), a percentage of each line (where you enter the percentage of your choice), or a custom invoice amount for each line .

Settle a percentage

In this QuickBooks progress billing example, we are creating an invoice for 50% of all estimate lines. Just enter the percentage you’d like to invoice for and the grand total (in this case $ 1,800 since the total estimate is $ 3,600) will appear in the box to the right.

Notice the “Due” column on the QuickBooks Progress Calculation and how the “Quantity” and “Rate” columns are now halved:

QuickBooks progress accounting

Calculate a custom amount

If you don’t want to be charged a percentage of the invoice, you can also enter a custom amount. If you choose a custom amount for each line, you can enter the Amount Due field:

QuickBooks progress accounting

Step 4: adjust the invoice

You may be wondering how your client will be kept informed of the progress of a project when you send a progress invoice. There are a few features that you need to enable in the Customize Invoice window so that your customer can see the progress you’ve made on the project for which you are invoicing.

First, look for “Margins” on the first “Design” tab in the “Customize invoice” window and deactivate the “Customize printed form with Paystub in window envelope” check box.

QuickBooks progress accounting

Then, in the Customize Invoice window, navigate to the Contents tab, click the Footer section, and then check the box next to Estimate Summary (Email & Web Only).

QuickBooks progress accounting

Finally, on the Contents tab too, click the target area of ​​the invoice layout and check the box next to “Show progress in line items (email only)”. This is shown below:

QuickBooks progress accounting

Then save your progress calculation using the “Save and New” or “Save and Close” options. Now when your customer receives their QuickBooks progress invoice by email, they can see the progress in the lower right corner of the invoice.

QuickBooks progress accounting

If you want to look back on your progress, this will be shown in the lower right area of ​​the invoice and the estimate. There is also a report titled “Estimates of Estimates and Progress in Invoicing by Customer” that is a helpful resource.

QuickBooks progress accounting

This report shows all of your company’s projects in their various stages of progress. In the image below, filtered by just one date, you can see the estimate of the sample project we billed for:

QuickBooks progress accounting

If the percentage you are invoicing for correlates directly with the percentage of the project completed, you can use the% Invoiced column to indicate what percentage of the job is done and how much is left.

Step 5: Repeat this process until the estimate is closed

You repeat this QuickBooks Progress Billing process until you have billed the entire estimate and the job is complete. Remember, if you are trying to invoice more than the total estimated, you can only add the remaining balance of the balance to a progress invoice. If you find that you need to bill more than the agreed estimate, you will need to work with your customer to update the estimate before you can bill the additional amount. As soon as you have billed the total estimate, the status of the estimate automatically changes to “Closed”.

It’s also worth noting that if you need to edit a QuickBooks progress invoice, you’ll need to make those changes to the estimate yourself – not the invoice. You can make changes until the estimate is closed.

QuickBooks Progress Sheet: The Last Word

QuickBooks’ progress accounting is a useful tool for ensuring that your company has the funds to successfully complete the work you have been asked to do. This is especially useful for large or long-term projects that require a lot of time and resources that you have to pay for in advance.

A version of this article was first published on Fundera, a subsidiary of NerdWallet.


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