PassThroughs
Chapter 2
Objectives
• What makes an expense Billable, Not Billable, or
Billed
• How to record transactions involving Expenses,
Items, Mileage, and Time that will be billed to
your customers
• How to add reimbursable Expenses, Items,
Mileage, and Time to Invoices
• How to use two-sided Items to track
reimbursable expenses
• How to use two-sided Items to track custom
ordered items
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CHAPTER 2: Pass-Throughs
SLIDE # 2
Objectives (Contd.)
• How to use two-sided Items to track
subcontracted services
• How to use the Unbilled Costs by Job
Report
• How to use the Time by Job Report
• How to use the Vehicle Mileage Tracker in
QuickBooks
• How to handle Multiple Pass-Throughs on
a single Invoice
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CHAPTER 2: Pass-Throughs
SLIDE # 3
Reimbursable (Billable)
Expenses
• QuickBooks allows you to pass expenses through to
customers for reimbursement
• To track a reimbursable cost, you’ll first need to record
the expense
• Then you create an invoice for the customer, to pass
the cost
• If you assign expenses to jobs, but do not intend to
pass them through for reimbursement,
– Click the invoice icon so that it has a red X through it
– This makes the line item “Non Billable”
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CHAPTER 2: Pass-Throughs
SLIDE # 4
Billable Expense transactions involving
Expenses, Items, Mileage and Time
• You can use Enter Bill or Write Checks
window to enter the expense
• To make it billable to customer
– Enter a Customer or Job name in
Customer:Job field
– The invoice icon shows that the expense is
billable
– Save and Close
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CHAPTER 2: Pass-Throughs
SLIDE # 5
Adding reimbursable Expenses,
Items, Mileage, and Time to Invoices
• Open the Create Invoices window
– Enter the Customer or Job name in the Customer:Job
field, a message appears to remind you that this job
has expenses that you designated as billable
– Click Time/Costs icon to display the reimbursable
expenses for this Customer
– Use appropriate tabs to see reimbursable Items,
Expenses, Time, and Mileage that have accumulated
– Click in the Use column to select this expense for
reimbursement, this will cause the expense plus the
markup (if any) to show on the Invoice
– Save and close invoice
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CHAPTER 2: Pass-Throughs
SLIDE # 6
Sales & Customers Preferences for
Reimbursable Accounts
• To track reimbursable expenses in one account
and the reimbursements in another account, set
the Sales & Customers Company Preferences:
– Set the default markup for your reimbursable
expenses and Inventory Items
– When Track Reimbursed income as expenses box is
checked, you can associate income accounts with
expense accounts, so that when you pass an
expense through to an Invoice QuickBooks will
increase the associated income account
– you need to associate each reimbursable expense
account with an appropriate income account
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CHAPTER 2: Pass-Throughs
SLIDE # 7
Two-Sided Items
• An Item used on both sales and purchase types
of forms is commonly called a “Two-Sided Item”
• Item setup screen includes purchase information
on the left side (Expense Account field) and
sales information on the right (Income Account
field)
• Two-sided item can be used on expense forms
(e.g. Checks and Bills) and sales forms (e.g.
Invoices and Sales Receipts)
• For two-sided items, you can generate reports
showing the profitability of each Item
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CHAPTER 2: Pass-Throughs
SLIDE # 8
Using Two-Sided Items (Pro and
above only)
• Possible uses of two-sided Items include:
– Reimbursable Expenses
– Custom Ordered Parts
– Subcontracted Labor
– Cost of Goods Sold postings
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CHAPTER 2: Pass-Throughs
SLIDE # 9
Two-sided Items to track
Reimbursable Expenses
• You can create two-sided Other Charge
Items to designate categories of expenses
(e.g. transportation, clerical, or material
expenses)
• Use these Items on both expense
transactions and sales forms
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CHAPTER 2: Pass-Throughs
SLIDE # 10
Two-sided Non-Inventory Items
to track Custom Orders
If you sell products
that you don’t hold
in inventory, you
can use
QuickBooks Pro’s
“two-sided Items”
to automatically
track the revenue
and costs for each
Item
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CHAPTER 2: Pass-Throughs
This is a “two-sided” Item.
It allows you to specify a
separate account for the
costs and the revenue on a
single Item setup screen.
SLIDE # 11
Two-Sided Service Items to Track
Subcontracted Labor
• If you hire subcontractors, you may want
to create a two-sided Service Item for
each subcontracted service
• This will allow you to pass subcontractor
costs through to Invoices and it will allow
you to create reports showing the
profitability of your subcontracted
services
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CHAPTER 2: Pass-Throughs
SLIDE # 12
Unbilled Costs by Job Report
• This report shows all of the billable
expenses and Items that you haven’t
passed through to Invoices
• Select the Reports menu, choose Jobs,
Time & Mileage, and then choose
Unbilled Costs by Job
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CHAPTER 2: Pass-Throughs
SLIDE # 13
Billable Time from Timesheet
• From the Employee Navigator, choose
Use Weekly Timesheet.
– On the Timesheet, enter subcontractor’s
name in the Name field and click Set Date
– As you enter the date, QuickBooks will display
a weekly timesheet showing the billable hours
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CHAPTER 2: Pass-Throughs
SLIDE # 14
Invoicing for Billable Time
• Click Invoice on the Icon bar
• Enter customer and job in the Customer:Job field
• Click Time/Costs to pass billable time through to this
Invoice
• Click the Time tab, click Options to modify how
timesheet information is transferred to Invoices
• Click OK to save the settings in the Options for
Transferring Billable Time window
• From the Choose Billable Time and Costs window, click
Select All to use all of the time activity for this customer
• The timesheet activity you selected on the Choose
Billable Time and Costs screen now shows on the
Invoice
• Enter Job information in the Memo field of the Invoice
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CHAPTER 2: Pass-Throughs
SLIDE # 15
Time by Job Report
• To see all the customers that need to be
invoiced for services, use a Time report
such as Time by Job
• Select the Reports menu, then select
Jobs, Time & Mileage, and then select
Time by Name
• Set the date fields
• Click Modify Report to format the report
to display the Billed and Unbilled columns
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CHAPTER 2: Pass-Throughs
SLIDE # 16
Vehicle Mileage Tracking (Pro
& above)
• QuickBooks Vehicle Mileage tracker allows you to track
vehicle mileage, post mileage to invoices, and run
reports for tax preparation
• To set up mileage tracking,
– Create an Other Charge item called Mileage
– Select the Company menu and select Enter Vehicle Mileage
– Select Add New from the Vehicle drop-down list and enter
vehicle name and description to create an item in vehicle list
– To set up your mileage rates, click the Mileage Rates button and
enter the mileage rate designated by the IRS for the appropriate
tax year
– Complete the Enter Vehicle Mileage window
– Click Save & Close to save your mileage entry
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CHAPTER 2: Pass-Throughs
SLIDE # 17
Vehicle Mileage Tracking Reports
• To create reports about your mileage
– Select the Reports menu, then select Jobs, Time & Mileage,
and then select Mileage by Vehicle Detail
– QuickBooks displays the rate based on the year the miles
occurred
– It uses the Mileage rates window to look up the rates
• To see all mileage that has not yet been billed, use a
Mileage report such as Mileage by Job Summary
– Select the Reports menu, then select Jobs, Time & Mileage,
and then select Mileage by Job Summary
– Click Modify Report to format the report to display the Billed,
Unbilled, and Not Billable columns
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CHAPTER 2: Pass-Throughs
SLIDE # 18
Multiple Pass-Throughs on
One Invoice
• From the Customer Navigator, click Invoices
• Select Customer name from the Customer:Job list and click
OK to the billable cost reminder
• Select Time/Costs and click the Mileage tab
• Select Use on the Mileage, Items, Expense
• Click OK to post all selected pass-throughs to the invoice
• Click the Time/Costs button on the invoice to re-display the
Billable Time and Costs window.
• Click the Time Tab and click Select All on the unbilled
Expenses
• Click Print Selected time and costs as one invoice item
• Click OK to post all of the selected pass-throughs to the
Invoice
• Preview the resulting invoice by choosing Print and Preview
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CHAPTER 2: Pass-Throughs
SLIDE # 19
Chapter Review
• What makes an expense Billable, Not Billable, or
Billed
• How to record transactions involving Expenses,
Items, Mileage, and Time that will be billed to
your customers
• How to add reimbursable Expenses, Items,
Mileage, and Time to Invoices
• How to use two-sided Items to track
reimbursable expenses
• How to use two-sided Items to track custom
ordered items
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CHAPTER 2: Pass-Throughs
SLIDE # 20
Chapter Review (Contd.)
• How to use two-sided Items to track
subcontracted services
• How to use the Unbilled Costs by Job
Report
• How to use the Time by Job Report
• How to use the Vehicle Mileage Tracker in
QuickBooks
• How to handle Multiple Pass-Throughs on
a single Invoice
PAGE REF # 42
CHAPTER 2: Pass-Throughs
SLIDE # 21