A billable expense is a cost you pay out of your own business, a shipping fee, a subcontractor's bill, that you plan to pass through to a specific customer. Mark it billable and assign the customer when you enter it, and QuickBooks holds it ready to add the next time you invoice that customer. Here's what that looks like in practice.
1. Turn billable expenses on. Go to the gear icon, then Account and settings, then the Expenses tab. Turn on Make expenses and items billable. While you're there, you can set a default markup percentage and choose whether billable costs should track to a separate Billable Expense Income account.
2. Mark the expense billable when you enter it. On an expense, check, or bill, assign the Customer it's for, and check the Billable box next to the line. Add a markup here too if this particular charge needs a different rate than your default.
3. Save the expense as usual. It posts to your books like any other expense; the only difference is it's now waiting to be passed through to that customer's next invoice.
4. Add it to the customer's invoice. When you create, or open, an invoice for that customer, QuickBooks shows the billable expense under Add to invoice on the right side of the screen. Click Add to pull it onto the invoice as its own line.
5. Confirm it's off the pending list. Once it's added to an invoice and saved, that expense drops off the billable queue for that customer, so nobody accidentally bills it a second time.
The Billable box is easy to forget in the moment, especially on a bill entered weeks before anyone gets around to invoicing that customer. An expense that should have been billable but wasn't checked just sits in your books as a cost with nobody on the other end of it.
It also assumes someone remembers to look at the Add to invoice list before sending a customer their next bill. On a business with dozens of active customers and expenses coming in constantly, that list either gets checked religiously or it quietly turns into a running tally of money nobody's actually collected.
When a bill comes in tagged to a job or project in another system, we've built rules that check the Billable box and assign the right customer automatically, so it's never left to whoever happens to be entering the expense that day.
Instead of relying on someone to open the Add to invoice list before sending a bill, we've built invoicing that pulls every billable expense sitting against that customer automatically, so nothing gets missed or billed a cycle late.
Tell us how you currently catch, or don't catch, billable costs before they go out the door, and we'll tell you if that process can run itself.
Tell us where it breaks down for you, the box not getting checked, the queue not getting reviewed, and we'll tell you if it's worth automating. Billable expenses are one example of money that slips through a manual step; we fix that wherever it's happening in your business, not just here.
Let's talk →It means a cost gets tagged to a specific customer so you can charge them back for it on their next invoice, instead of absorbing it as a regular business expense. You check the Billable box and assign the customer when you enter the expense, check, or bill.
It's an optional separate income account for tracking money you've recouped from billable expenses, kept apart from your regular sales income. You turn it on under Account and settings > Expenses > Track billable expenses as income; without it, reimbursed costs just reduce the original expense account instead.
Same mechanism as billable expenses, different source: mark a time entry as billable when you log it (or check the box on an existing timesheet entry) and assign the customer. It shows up under Add to invoice right alongside any billable expenses for that same customer.
Enter the bill, check, or credit card charge, assign it to the right Customer:Job, and click the small invoice icon in the Billable column to mark it billable. When you're ready to invoice that customer, click Add Time/Costs on the invoice to pull in everything marked billable for them.