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S
SH100
January 4, 2024
Question

Billable Expense GL Entries

  • January 4, 2024
  • 1 reply
  • 0 views

Hi!

 

Homebuilder using QBO for the first time in 2023.

 

We used the Billable Expense feature to track our build jobs by assigning each transaction to an internal customer/project (a project for each new home built) and checking the "Billable" checkbox. These expenses were categorized to an Inventory Asset account named "New Builds Billable". At the conclusion of each build job (project) we invoiced the internal project. This gave us a way to make sure we had assigned the appropriate costs to each project. We matched the deposit from the sale with the internal invoice.

 

On the P&L, our Income now shows "Billable Expense Income" that equals the amount on the internal invoice, as desired. Now, we need to make journal entries to move that same amount from the Inventory Asset account (New Builds Billable) to Cost of Goods Sold so we relieve the inventory account and show a proper net income. 

Any advice on the proper GL entries to make this happen?

 

Any suggestions if there is a better way to track expenses by build job? We don't want to just expense everything as in our industry materials and sublet labor for new builds are technically considered inventory until the completed home is sold.

 

Thanks in advance for your feedback!

1 reply

M
Mark_AG
January 4, 2024

Hi there, @SH100.

 

I've seen your post about moving Billable Expense Income from the Inventory Asset account to the Cost of Goods Sold in QuickBooks Online. Before making any journal entries, I'd like to provide a few important reminders:

 

  • Review the products and services you use, as they'll reflect in your Cost of Goods Sold when you record them as billable. Ensure they are assigned to the proper accounts.
  • Before making any changes to your accounting records, it's always a good idea to consult with your accountant or tax advisor to ensure compliance with accounting standards and regulations.
  • When entering and categorizing expenses, it's crucial to ensure that the information is accurate and consistent. This will help maintain the integrity of your financial records and avoid potential issues with tax authorities.

 

With these reminders in mind, you can proceed with the journal entries mentioned on the first bullet. However, always remember to consult with your accountant or tax advisor to ensure that the transactions are appropriate and compliant with accounting standards.

 

If you're looking for a better way to track expenses by creating jobs, you can continue using QuickBooks' Projects feature. When you mark an expense as billable, you can invoice it to your customer later. This feature is useful for passing costs to your customers, such as materials or subcontractor services.

 

If you use QuickBooks Time, your employees can track their time directly to the project you set up.

 

Let me know if you have further questions about Billable Expense and Projects feature in QuickBooks Online. The Community team is always here to assist you.

S
SH100Author
January 4, 2024

Hello,

 

Thanks for the response!

 

You said "With these reminders in mind, you can proceed with the journal entries mentioned in my previous response."

 

I don't see your previous response with the GL entry suggestions. Will you double check and make sure you posted this?

 

Thanks again!

 

M
Mark_AG
January 4, 2024

Hello there, @SH100.

 

I appreciate your quick response. Let me update my answer above. What I meant is you'll have to review the products and services you use so that it can help you identify which account to credit and debit when creating a journal entry. However, you'll need to consult your accountant to ensure you're doing it correctly.

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