Ask the Accountant…
Question: Should I be marking items as “Billable” in QuickBooks Premier?
Answer: No, marking an item as billable in QuickBooks Premier tells QuickBooks that the expense is going to be reimbursed to you by your customer, and it is tied to a designated customer. When you click the “Billable” button on a check, bill or credit card charge, QuickBooks will ask you, “Do you want to add the outstanding billable time and costs to the next invoice for that client?” In Premier, you can just repeatedly say, “No, don’t include these,” however, this causes a major problem when you migrate from Premier to QuickBooks Online.
When you migrate into QBO, all the billable expenses in QB Premier will come over as unbilled income, creating an accounting headache as they are expected to be included on upcoming customer invoices. The only way to fix this issue is to go into the original transaction and uncheck “Billable” and the customer/job to which it’s attached. This is fine if you only have a few billable items, but it can be insurmountable if you have hundreds or thousands of them.
Billable expenses should not be used in our industry, except in unusual circumstances. We have purchase orders which track expenses into the appropriate accounts.
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