I have an estimate that includes labor hours at a set rate and expenses at an overall number. How do I get line item expenses in the invoices linked to the estimate?

I create invoiced that include multiple roles with agreed upon rates and estimated hours.   Then, as is typical, we include roughly 10% additional for expenses.   This covers all travel expenses related to the job.

When we incur the expenses, they are categorized, as we need to do this for invoicing.   So, the expenses are things like airfare, parking, taxi, hotel, etc.

When I create the invoices, the labor hours link to the estimate so I get an accurate view of labor spent vs invoiced.  Expenses are another story.   Because expenses are a single line in the estimate, but multiple lines in the invoice, I can't seem to link the actual expenses to the estimates.   The impact is all of the reports of estimate compared to invoiced don't include these expenses.  This is a problem!    

Answer

"To align the costs with the invoices, you are saying I need to enter them as Item/Details."

For something you incur and charge back, the point would be to show the same thing you bought is what you sold. Example: We contract to do your website, so I hire a graphic artist to be charged back to you = a Service item marked as "reimbursed" meaning I link it to an expense account (for data flow when I list it on the payment to the subcontractor) and to an income account (for data flow when I list it as a billable sales charge to you).

Or, I simply want to Track that I hired a graphic artist, and that is a direct cost to me for your project, so I job track it as not billable, but I need to see my costs relative to your Revenue under the Fixed Contract amount, to know if I underbid that contract fee and wildly missed the mark on projecting my costs.

So that I don't make that same mistake next time.

"My client requires a breakout of the  expense types so they can validate we our honoring their travel policies, I already have a Product/Service Item as "Expense" or "Travel Expense".  It sounds like I need to create new Product/Service Items for each expense type (airfare, hotel, taxi) that I need to track."

The Products/Service flow the data to the accounts. You might want to separate what is separate per the tax form you file; you cannot report to the IRS what you did not track, when the IRS wants it separate, or what you customer wants to see. That would be, for instance, Travel is not the same as Lodging if the customer expects to see Lodging. The reason to use different Service or Noninventory or other charge items is to provide details for your use on quotes and to customers, while avoiding micro-managing the chart of accounts. The IRS expects me to report Contract Labor. For my own business, I want to track and quote Subcontractors by what they do for me: Service items for painting and landscaping and surveyor and electrical and plumber and structural engineer. The IRS doesn't care. They all link to Contract Labor as Expense. My customers care, and so do I; the service items also link to Revenue, for when I do not include that in my contract flat fee, but will charge it to the customer for whom I hired that service provider.

"But, I don't see how to make each of those new product/service items sub-items of my main "Expense" Product/Service."

Products/Service are Expense only, income only, or Both types of activities. That way, I can see that I hired a graphic artist who worked 5 hours at $150 an hour, and I charged that to you under a Time & Costs agreement as 5 hours at $165 an hour = 10% markup. My financial reporting shows One Entry as expense and One Entry as revenue.

"Also, knowing that I have already entered multiple expenses as Category details, rather than Item/Details, is there anything I can do differently elsewhere (other than the bills) that will work equally well?"

Please see my previous attachment. It shows how you provide the project-related data using product/services.


You really have a Mix of things in this topic: The Actual entries can be billable; or you intend to invoice from the Estimate. You don't have to invoice from the estimate to use it for comparison reporting. You don't even need to provide it to the customer; that is your Planning and Tracking tool. You can use it for Quotes or internally. It is Scope of Work.


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