IV Estimates

Estimates/Proposals

In today’s conclusion of the customer management portion of this series, you’ll draft estimates/proposals and tie them to progress invoices for longer-term projects.  We'll also practice payroll entry.

Setup

Assure estimates and progress invoicing are activated:  Edit > Preferences > Jobs & Esitmates > Company Preferences tab > yes checked for “Do you create estimates?” and “Do you do progress invoicing?”. Don’t print items that have zero amount is checked.

Proposals/Estimates

Customers > Create Estimates or Customer Center > New Transactions > Estimates

Default templates are in the upper right dropdown.

Progress invoicing a percent of an estimate

Progress invoices are used when work is not completed, but customers pay a portion up-front, or as work progresses. They include estimated and prior paid amounts. Create a new invoice for a customer with an open estimate, and select the estimate to the invoiced in the Available Estimates pop-up. In the next pop-up, select whether the entire estimate, a percentage, or specific items will be invoiced.

Progress invoicing selected items

To invoice for specified items, select Create invoice for selected items or for different percentages of each item in the Create Progress Invoice Based on Estimate pop-up when you choose the estimate to invoice. In the Specify Invoice Amounts… pop-up, you’ll see Estimated and Prior Amounts. Check Show Percentage and in the Cur % column, enter the remaining percentage due (you could also check Show Quantity and Rate and enter the remaining quantity).  

Make sure that the amount for items or expenses you have passed through in the Outstanding billable time and costs is zero in the main invoice (and that you have selected not to print items with zero balance in your preferences).

Adjustments

For change orders, adjust the original Proposal. QuickBooks will prompt you to add a Change Order message, and you can accept the default wording, edit, or delete it.

Final Invoicing

For final invoicing, select “Create an invoice for the remaining amounts of the estimate” in the pop-up. In the “Billing Time/Costs” pop-up, select “Select the outstanding billable time and costs to add to this invoice?”. In the “Choose Billable Time and Costs” pop-up, select all Time to pass through to the invoice.

In the main invoice, make sure the dollar amounts for the passed through work are zero, but are accounted for in the estimate lines.

Payroll

If you don't use a payroll service that interfaces with the program to input your entries for you, you'll input your payroll information yourself. Entering the payroll expenses and liabilities are best done in a journal entry, while the payments made as a result can be done either as journal entries or checks. Refer to the handout to see how this process might look.

Complete the payroll entries for the following pay period after the two warm-up entries.

Journal Entry to record your expenses and tie them to liabilities dated 2/29/16 if accrual basis, 3/3/16 if cash basis:
  Debit Salary/Wage expense for total gross pay $3,748.00
  Debit Employer Payroll Tax Expense $394.60
  Debit Workers Comp Insurance Expense $31.68
      Credit Payroll Liabilities $4,174.28

Journal Entry to record the payroll company withdrawing direct deposits on 3/1:
  Debit Payroll Liabilities $1,913.52
      Credit Bank Account $1,913.52

Journal Entry to record the payroll company withdrawing payroll taxes and insurance dated 3/1:
  Debit Payroll Liabilities $$1,306.0
      Credit Bank Account $1,913.52

Live Check #1003 to Belle Journey $954.76 withdrawn from the bank account against the Payroll Liabilities account dated 3/3.

It was asked in class how to cut a check directly, bypassing the first step. Let's use Belle's as our example. First, enter $954.76 as you normally would for the check amount, then enter the following in the detail lines:

  Salary/Wage expense 1,260.00 memo Gross Salary
  Payroll Liabilities  -163.41 memo Federal Income Tax
  Payroll Liabilities  -81.34 memo Social Security Withholding
  Payroll Liabilities  -19.02  memo Medicare Withholding
  Payroll Liabilities  -29.66  memo State Income Tax
  Payroll Liabilities  -11.81  memo CA SDI

This expenses Belle's gross salary on her check date (which would be three days late if you were on accrual basis, but correct for cash basis), and accrues her withholdings into your payroll liabilities account, so that it's there when you pay your payroll taxes. You will need to enter your workers compensation and employer taxes into the payroll liability separately.