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bigben56
March 23, 2023
Question

Invoice Editing - Changing service income to material expense

  • March 23, 2023
  • 1 reply
  • 0 views

I have paid invoices for 2022 and most of these paid invoices categorize the entire invoice as service income which brings my income higher than my actual income was. I want to edit some of the items with inside my paid invoices to reflect a material expense as opposed to a service income. For example, some of the invoices I have include mulch material, mulching, weeding and power washing for a total service income of $750. The cost for the mulch (which is a material expense) was included in this invoice and was $150. How do I edit the mulch to reflect a material expense and then keep the service income activities still in the invoice?

1 reply

AlcaeusF
AlcaeusF
March 23, 2023

Hi there, bigben56.

 

I'm here to share information about managing items' income expense accounts on invoices in QuickBooks Online (QBO).

 

To start, billable expenses (material expense cost) will not directly negate the service income account, but it's posted separately as an expense (material expense account). However, you should still get the correct Net Income amount when you pull up the Profit and Loss (P&L) report.

 

Just make sure that the item in question (mulch) is assigned to a material expense account instead of the service income. If it's not yet assigned, here's how to do it:

 

  1. In QBO, go to the Sales menu on the left pane.
  2. Proceed to the Products and services tab.
  3. Locate the item in question and click Edit on the right side under the Action column.
  4. In the Income account drop-down, choose the material expense account.
  5. Hit Save and close.

 

To know more about managing invoices and service items in QBO, consider checking out these articles:

 

 

For more tips and other resources you can use in the future, I recommend visiting our website: Self-help articles.

 

Please leave a comment in this thread if you have additional questions about this or anything else QuickBooks. I'll be here to assist. Stay safe.

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bigben56Author
March 27, 2023

Thank you,

 

When I go into edit these items to supplies and materials as apposed to services they are saved that way. However, when I go to run the report for my P&L it will still list these items out as "services" in the account section and not as expenses.

DivinaMercy_N
DivinaMercy_N
March 27, 2023

Thanks for getting back here, @bigben56. I want to ensure you'll be able to assign the item to the correct expense account in QuickBooks Online (QBO).

 

I appreciate you sharing the outcome of the steps you've performed. To further help you with this, we have to ensure that the correct expense account (Material Expense) is assigned to the item (Mulch). Here's how:

 

  1. Go to the Gear icon and select Products and services.
  2. Then, look for the service item you need to edit and click Edit.
  3. From there, scroll down to the Purchasing information section and select the Material Expense account in the Expense account field.
  4. Next, check the box for Also update this account in historical transactions button.
  5. When done, click Save and close. 

 

Once done, run the Profit and loss report and check the Material Expense account. 

 

Some items can be also charged to the customer. To do so, we can use the billable expense feature. 

 

Modifying the details of the report to include only the details you need is easy in QBO. For the detailed steps, check out this article: Customise reports in QuickBooks Online.

 

I'm always here ready to lend a hand if you have any other concerns managing invoices from your vendors. Have a good one and stay safe. 

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