How should I track work performed by a supplier (or subcontractor) in QuickBooks Pro so I can pass it on to a customer?

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Question

How should I track work performed by a supplier (or subcontractor) in QuickBooks Pro so that I can pass it on to a customer?

Answer

In QuickBooks Pro, there are three different ways to track work by a supplier (or subcontractor) so that you can pass it on to a customer: - Enter the work as a service item on the Items tab of a bill, cheque, or credit card charge. Mark it as billable for the specific customer or job. Then transfer the item to a sales form by clicking Time/Costs on the sales form and choosing the Items tab. - Enter the expense on the Expenses tab of a bill, cheque, or credit card charge. Mark it as billable for the specific customer or job. Then pass on the expense as a reimbursable expense by clicking Time/Costs on a sales form and choosing the Expenses tab. - Enter the hours worked day by day either by doing time tracking or importing time data. Assign a service item and customer or job, and mark the time as billable. Then transfer the hours and service item to a sales form by clicking Time/Costs on the sales form and choosing the Time tab. You must be careful that you do not inadvertently charge the customer twice for the same work. Therefore, we recommend that you do NOT make supplier time billable if you track their time on timesheets or in the Timer. Indeed, you may not even need to track their time. If you do not specifically need to track the number of hours that a supplier (or subcontractor) works day by day: Do not use time tracking (or import time data) for this person. Instead, set up a service item for each type of work the person performs. Select the checkbox "This service is performed by a subcontractor." Enter a description for sales transactions as you want the work described on sales forms. If this work is hourly, enter the supplier's rate in the Cost field and the rate you charge in the Sales Price field. (If the supplier charges a flat fee that varies, leave both fields at 0.00.) Then on the Items tab of a bill cheque, or credit card charge, enter the following: - Item = your service item for the type of work - Qty = number of hours worked (if the work is hourly) - Cost = hourly rate or flat fee - Customer:Job = the job that this work was for - Billable? Yes If the person works at an hourly rate, QuickBooks calculates the amount for each type of work on the bill, cheque, or credit card charge. On a purchase report by item, the quantity for each service item tells you the number of hours worked. (You can give this report columns for each separate job, or filter for one job.) If you need to track the number of hours that a supplier (or subcontractor) works day by day: You can use time tracking to track these hours, but we recommend that you NOT make the hours billable. The reason is that simply tracking the hours does not record any cost to your business for these hours. You must enter the cost by using a bill, cheque, or credit card charge. When you enter the cost (either on the Expenses or Items tab) and assign the cost to the job, you are likely to make the hours billable (the default setting). If the same hours are billable both in time tracking AND on the bill, you are very likely to transfer them to the sales form and charge twice for the same work.

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