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Dr_Kinu
December 8, 2023
Question

Invoice Line Items for a Construction Company

  • December 8, 2023
  • 1 reply
  • 0 views

I am using QB Desktop Premier Contractor Edition and we are in construction that take draws. My question is that the line items are listed as Income but I am thinking it should be listed as an expense because the draw is reimbursing the company of the monies spent. I would like some guidance on this. The way it is currently setup it is giving the owner more income than he is actually receiving. Majority of the monies we receive is from construction draws. We don't make a profit until we sell the building. I hope I make sense so I can get help.

1 reply

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FateCandylaneT
December 8, 2023

I'm glad to see you posting here today, Dr_Kinu.

 

I've seen that you've posted twice in this forum with the same concern. Don't worry, my colleague has already provided a solution to guide you in managing line items on your invoices. Feel free to visit this link: https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/re-do-i-categorize-a-construction-draw-received-as-income-or/01/1354390#M202624.

 

I'll always be here, ready to back you up if you require further assistance managing construction loan draw. Please let us know any time in the thread. Keep safe!

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    Dr_KinuAuthor
    December 9, 2023

    My question is about the invoice line items. For a construction company, shouldn't the line item account be a liability or expense because the service provided is not income producing. Right now,  the service item is going to income and that's not correct. Please help. Thanks

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    GlinetteC
    December 9, 2023

    Hi there, Dr_Kinu.

     

    I have additional details to share about the service item used for creating invoices.

     

    When creating an invoice in QuickBooks, it produces income instead of liability because an invoice represents a request for payment from a customer for goods or services provided. 

     

    If you intended to categorize it as a liability, you would have needed to create a bill rather than an invoice. When you generate a bill, it represents an amount owed to a vendor for goods or services received, and it increases the accounts payable, which is a liability account.

     

    In this scenario, I would advise you to consult with your accountant. They can present you with more options for managing this situation effectively, preventing any errors in your books, and maintaining accuracy.

     

    If you need further information about invoice line items for the construction company, add them in the comment below. I'm available to assist you. 

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