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Invoicing for cost plus or time and materials jobs


A time and materials contract means that you agree to complete a job for the documented project costs plus the labor costs (at a certain rate) for you and your crew.

A cost plus contract means that you bill your customer for all documented costs plus a fee (generally a percentage of the documented costs).

It's very important with these types of contracts that you make sure all your time and expenses are captured on an invoice. Any cost that doesn't get invoiced could be a loss that you can't recover.

Important: Before you actually create a cost plus or time and materials invoice, you must enter the job costs you incurred. You should also enter time information for the employees and subcontractors who worked on the job, using either a weekly timesheet or a single activity entry. As you enter the billable time and expenses, make sure to assign your time and expenses to jobs. QuickBooks keeps track of your billable time and expenses, and then helps you make sure that it all gets billed.

To do this task
  1. Go to the Customers menu and click Invoice for Time & Expenses.

    If you can't see this menu item, you may need to turn on the preference.

  2. Enter the date range for the time and expenses you want to invoice.

    A list of all customers with unbilled time and expenses in that date range appears. Each column shows each customer's subtotal of all unbilled items for each type of expense.

  3. Sort the list to find the customer you want to bill by clicking a column header.

    For example, you can click the Total column header to see the customers with the largest outstanding amounts. Or, you can click the Customer:Job column header to sort the list by name.

  4. (Optional) To hide or show a column, right-click any column header and select or deselect it from the list.

    Hidden expenses are not added to the invoice.

  5. Click a row to select the customer you want to bill.

  6. (Optional) Select the checkbox at the bottom of the window if you want to view or select specific billables, or if you need to change your option settings for how line items are handled on invoices.

    If you don't select the checkbox, all billables for the selected customer and date range shown in the Invoice for Time & Expenses window are transferred directly to the invoice using your existing option settings.

  7. Click Create Invoice.

    If you selected the checkbox, the line items on the invoice are left blank, and the Choose Billable Time and Costs window opens so that you can choose specific billables to include on the invoice.

    If you didn't select the checkbox, all of the outstanding billables for the selected customer are transferred directly to the invoice.

  8. If you're choosing specific billables:

    1. In the Choose Billable Time and Costs window, click the tab for the kind of cost you want to include on the invoice.

      Click Time to include time billable to this job.

      Click Expenses to include other costs and expenses you incurred, but did not enter as line items. For example, you might include shipping charges that you entered on the Expenses tab when you paid for items you received from a vendor.

      Click Mileage to include billable mileage expenses for this job.

      Click Items to include line item purchases for this job. These include inventory parts, non-inventory parts, subcontracted services, and other charge items.

    2. In the Checkmark column, click next to each billable item you want to include on the invoice. You can choose to bill for some of your time and costs now and hold the rest for later billing.

    3. (Optional, for time and mileage only) If you haven't already done so, click Options to determine how you want time and mileage costs to appear on the invoice.

      You can combine several time or mileage activities, include descriptions, and so on. These options let you view the detail in QuickBooks, even if you print the invoice showing only single line items. More.

      If you have multiple instances of the same type of work charged at the same rate during this billing period, and you want them all to show up as one line item, select Combine activities with the same service item and rate.

      If you prefer a separate line item on the invoice for every task, select Enter a separate line on the invoice for each activity. In this case, you also choose how QuickBooks will fill in the Description field on the invoice. Click transfer activity notes if you want the description field to show the notes entered in the time entry. This is useful if the notes describe something unique about the project that you want to appear on the invoice. Click transfer item descriptions if you want the field to show the description of each service item, as you defined when you set up your items. This is useful if you want only a general description about the type of work that was done. You can also choose to transfer both notes and service item descriptions.

    4. (Optional, for expenses only) Add a markup to the expenses you selected.

      To do this task

      1. Click the Expenses tab to bring it to the front.

      2. If necessary, change the markup shown in the Markup Amount or % field.

        QuickBooks fills in this field with the markup set in the Sales & Customers preferences. If you change the markup here, it applies only to this invoice. You can enter the markup either as a flat amount or a percentage. For example, you could enter 10.00 (which QuickBooks would interpret as ten dollars), or 10% (which QuickBooks would interpret as ten percent).

      3. Click the Markup Account drop-down list and choose the name of the account you use to track markup income.

    5. (Optional) If you want the costs you select to appear as a single line item when you print the invoice, select the Print selected time and costs as one invoice item checkbox.

      Important: Do this only if you are certain you want the printed invoice to show only the total of the costs (and not a line-by-line listing of each cost). After saving an invoice this way, you'd need to make the time and costs billable again if you wanted to go back and print the costs line by line.

      When you print the invoice, it shows one amount (the sum of all the expenses plus any markup). The Description column lists the amount as Total reimbursable expenses. If you want, you can change this description by editing the onscreen version of the invoice.

    6. Click OK to add the costs you selected to the invoice.

  9. In the Create Invoices window, click the Template drop-down list to choose a template form, such as the Time & Expense Invoice template.

    The columns available for your line items depend on the invoice template you use.

  10. If necessary, modify line item entries.

    For example, you may want to modify the hours or amounts before sending the invoice to your customer. You can also add or delete items, or add or delete lines between items. To do so, right-click an item and choose Insert Line or Delete Line.

  11. Subtotal the costs for your billable items and add your markup.

    1. In the Create Invoices window, place your cursor on the next available line of the invoice, and in the Item column, select the Subtotal or Reimbursable Expenses Subtotal item. (If you don't have a Subtotal item in your Items list set one up now). The Subtotal item automatically adds up all costs and puts the subtotal in the Amount column.

    2. To add a markup, place your cursor on the line below Subtotal and select the Markup item. (If you don't have one listed, set one up now). The Markup item automatically adds a markup based on the subtotal.

      If the markup on this invoice is different than the rate that automatically appeared in the Rate column, you should change the default rate to the correct rate for this project. For example, if the rate that fills in automatically is 15% and you only have a 10% markup on the contract for this project, then you should change the 15% to 10%.

  12. Click the Print drop-down arrow at the top of the Create Invoices window, and then click Preview to see how the invoice will look when it is printed. The printed version of an invoice looks different than the screen version.

  13. Click Print in the Preview window to print the invoice now, or select the To be printed checkbox in the Create Invoices window to print it with a batch of invoices later.

    If you prefer, you can e-mail the invoice to your customer.

  14. When you're satisfied that the invoice is correct, click Save & Close.

See also

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