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Save_the_small_businesses
November 30, 2024
Question

How do I handle it when sending the customer a bill for a future expense?

  • November 30, 2024
  • 1 reply
  • 0 views

<<Background>>I use a vendor to file government papers and pay some government fees for my clients. The vendor collects money from me, at the time I make the request, for the full amount of the government fees and their service charge. I also get a charge later for an unpredictable international fee. These come out through a bank draft.<<What I have been doing>> I have been paying all of this out of pocket, up front. I have been invoicing the client once I know what the full amount is to include the unpredictable international fee. <<What I want to do but don't know how>> I want to guard against the situation where the client decides not to pay after I have already given out the money. Therefore, I want to have the client pay me up front so I have enough money to cover the vendor's bill without dipping into my own money. I want to estimate what the full charges will be, including the unpredictable international fee, plus my own service charge, and only have the vendor do the work once I have the client's money in hand. After the fact, I want to give the client back as much as they overpaid due to my estimate or charge them more for what I underestimated. What is the best way to handle this in QuickBooks?

1 reply

R
Rea_M
November 30, 2024

I'm grateful for the detailed information you provided, Save_the_small_businesses. It's very smart to look forward to issues you could have and make changes that protect yourself. Effectively managing your clients' future expense bills is essential for nurturing strong business relationships. Let me explain and walk you through the process to ensure you handle it with confidence and precision.

 

To ensure a smooth billing process in QuickBooks Desktop (QBDT), I recommend establishing a clear agreement (to pay in advance, refund if overpaid, and bill again if underpaid) with your clients. This will cover the anticipated vendor charges, allowing you to provide them with a transparent and predictable billing experience. 

 

With that, you can also collaborate with your accountant to guide you on how to properly track your transactions, safeguarding the precision of your financial data. This proactive approach not only enhances your client relationships but also empowers you with clarity and control over your finances.

 

Once your customers agree, you can then create invoices for the estimated amount of their charges. To do this, follow these steps:

 

  1. Go to the Customers menu and select Create Invoices.
  2. From the Customer: Job dropdown, select a customer or customer job. 
  3. Fill in the relevant information at the top of the form like the Date, Invoice #, Bill to, and Terms.
  4. In the detail area, select the item/s and enter the estimated amount. 
  5. Click Save & Close. 

 

In case you'll be giving refunds for clients' overpayments, check out Option 2 in this article to guide you through the whole process: Give your customer credit or refund in QuickBooks Desktop for Windows.

 

Additionally, would you like to explore the full range of workflows and customer-related transactions available in QBDT? I recommend checking out this article for a comprehensive overview: Track customer transactions in QuickBooks Desktop.

 

Don't hesitate to ask follow-up questions while recording your customers' future expense bills. We want to ensure that all your inquiries are resolved. We'd be glad to offer our help again.

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