How to Create an Invoice from an Estimate in QuickBooks Pro 2017
During this QuickBooks Pro 2017 tutorial video, we will show you how estimates work and begin creating one.
Alright we’re working our way down through module 4 where we’re talking about working with customers and jobs. We need to talk about estimates now. So we’re in section 2 and this is part 1 of section 2.
I recognize that all of you will not use the Estimate feature but a great example of an estimate is in construction. If I want to have my kitchen remodeled I’m going to ask for a quote or an estimate on the job. And QuickBooks has the ability to handle those estimates and then turn them into invoices when you’re ready to actually invoice your customer so you can get paid. So let me show you how estimates actually work.
If you’re on your Home screen you’ll notice that if you’re looking in your Customer group here that Estimates is the very first icon. Now if you don’t have the Estimates icon that’s because you told it in the EasyStep Interview that you do not create estimates. You can always turn it on or off in the Preferences, like we talked about. Even if it is here and you don’t want to use it notice that you can just start with the next item on the list which is Create Invoices. You don’t always need to estimate a job and then turn it into an invoice.
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You’ll notice that Estimates and Purchase Orders here are on the same line and that’s because they’re considered non-posting. If you create an estimate and the customer never asks you to do the work it doesn’t affect your books. You would have to run specific estimate reports to see any estimate information that you’d like to be able to work with.
We’re going to go ahead and create an estimate.
Now a couple of things I want you to notice. First of all the first thing it asks for is your customer and a job. Let’s say that I want to pull in my customer. I can start typing the last few characters of their last name or I can pick from the dropdown and pick my customer and my job.
Now a little tidbit of information. If you’re going to use the job feature use it consistently throughout QuickBooks. If you don’t use it what’ll happen is you’ll run reports and sometimes on those reports you’ll see a category called Other and you’ll go what is that? So use it consistently.
So if I’m trying to create an estimate for Tom Allen’s kitchen remodel I’m going to click on the Kitchen Remodel.
Now what if you need to create an estimate for a customer or a job that’s not in the list yet? Let me take off this Kitchen Remodel right here. Let’s say that my customer has now asked me for an estimate for a sunroom.
I can add it right from here. I don’t have to go back to Home and back to Customers and set it up. All I have to do is at the end of my customer name I’m going to put a colon and then I’m going to put the name of the job. In this case it is Sunroom. What’s going to happen is when I hit the Tab key or the Enter key to leave the field it’s going to say Sunroom is not in the list. Would you like you to set it up? I would Quick Add a Job.
If it’s a customer I would go through and set up that customer the way we did. So let me Quick Add this. And now you’ll see that I have two jobs for Tom Allen. His sunroom and his kitchen remodel. If it’s a brand new customer just type their name in, last name, comma, first name like you see here and then Tab or Enter and then you can add the new customer that way. You cannot add a customer and a job at the same time. You add the customer first then come back and add the job.
The next field over is the Class field and we talked about classes allow you to break your company down into smaller sections if you need to. So if you had two locations this list might indicate the locations and you choose the one you want. If you have departments this might be the departments. But if you’re going to use classes use it consistently, again so reports will be accurate.
Here’s the list of templates you can use for estimates. Now you can customize the ones that are here or create new ones which we’re going to do in a later module. But from here you can just pick the particular one you want to use on this particular estimate.
The next thing is the date. It’s going to pull in today’s date. You can change that if you need to to any date you like. And also the estimate number right here. There’s a lot of things in QuickBooks that are numbered, like checks, invoices, estimates, and they’re all going to start with number one.
You don’t want to send it out with a number one because they would know they’re the very first customer. So you can type in whatever number you want here. If your estimates happen to include letters then you can certainly put that in as well and it will name the next one sequentially until you happen to change it.
This is the name and address of the customer that you set up. If you happen to look at it and you say, “You know that address is wrong” or “I misspelled Tom’s name” go ahead and change it here. What will happen is when you’re finished and you try to save this it will pop up and say Would you like to change this permanently in Tom Allen’s record? And you will say Yes and that way you don’t have to go back to the Customers and change it.
Now let’s look down here at the bottom where it says Item. You have to actually click there to get this dropdown arrow to appear.
We all sell something. Whether it’s a service we provide, a physical item but this is where we’re going to have the line items that we want on our estimate. Now we have some items already set up that we’re going to play with for now and later we’ll go and actually create our own items. So let’s go ahead and pick Framing. I want you to notice that it brought in the description Framing labor and you can type over that all day long or add to that.
This will word wrap as long as you need it to word wrap. But let’s say this is probably an hourly thing is my guess. I’ll go ahead and put ten of these in here. Quantity of ten. And it assumes the cost based on when the item was set up. Now we can change that. What if this one time only we say the cost is going to be $50. We just type right over that and it remembers the $55 for the next time we use it.
Now just something I skipped over. That’s a unit of measurement here. Unit of Measurement means do you sell this by the foot, by the case, by the yard? If that’s the case you could have set up what they call a Unit of Measurement.
Now let’s talk about this Markup column for a moment. You can mark an item up a dollar amount or a percentage, either one. Keep in mind your customer is not going to see this. I’ll show you that when we’re done. But let’s mark this one up 30%. You have to type the percent sign or it won’t know it’s a percent. And notice if I tab through it that it does the calculations for me.
Now this last column where it says Tax this is for sales tax purposes. This particular item is not taxable even though you may charge sales tax for this particular estimate or for this customer.
Now I’m going to hit the Tab key and come down to the second line. I’m going to put one more in here just to show you how this works. I’m going to type W-O for Wood Door because I know that’s something they have in here. And I’ll pull in an Exterior Wood Door. And we’ll say there’s two of these.
Now I want you to notice that this time it has a markup already in there. That’s because when you create an item you’ll see that you can mark it up a dollar amount or a percentage. That’s because when you create an item you’re going to see there’s a place where you can tell QuickBooks on average I buy it for a certain amount and on average I sell it for a certain amount. And if you put both of those numbers in it assumes a markup.
But we’re going to delete that anyway and mark this up a dollar amount. So let’s say I mark this up 1,000 and there you go. It did the calculations for us. So you can see an item can be marked up a percentage or a dollar amount.
Now when you’re filling this out you can type forever. This is not the bottom. It’ll just go on and on and on forever. So just know you can put as much in there as you need to.
A couple things down at the bottom. You’ll see there’s a Customer Message. These are things like All work is complete, maybe Thank you for your business. You can click Add New if you wanted to add your own. One that’s added frequently is that the estimate is good for 60 days. So you can add your own customer messages to this. I’ll just pick one. There’s also a place for a memo at the very bottom where you can type anything you like there. And this Customer Tax Code, that means for sales tax purposes is this customer taxable or not?
Over on the right you’ll see it pulled in the subtotal, the total of the markup and then if there was sales tax what that is, and then you’ll see the total at the bottom. So that’s pretty much the set up for the estimate itself.
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Now what I want to do is I want to just give you a preview of what it looks like right now. I’m going to go back up here where it says Print and I’m going to preview this. This is what your estimate is going to look like currently. You’ll notice it’s really plain. It’s got your business name and address at the top.
It’s got the word Estimate. And if you need to zoom in on any of this you can click but notice that your customer does not see the item and they don’t see the markup. So we’ll talk later, like I said, about customizing your estimates or your forms. So I’m going to close that.
Now let’s go ahead and do this. I want to go ahead and stop the video here. There is a part 2. So why don’t you go ahead and meet me in part 2 and we will continue talking about all these options up here on your estimate.
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Simon Calder
Chris “Simon” Calder was working as a Project Manager in IT for one of Los Angeles’ most prestigious cultural institutions, LACMA.He taught himself to use Microsoft Project from a giant textbook and hated every moment of it. Online learning was in its infancy then, but he spotted an opportunity and made an online MS Project course - the rest, as they say, is history!
