Creating Estimates in QuickBooks Online

Once you’ve entered customers and items in QuickBooks Online, you’re ready to start creating estimates.

In a previous column, we showed you how you could get up and running with QuickBooks Online and create your first invoice within an hour. You can continue to add customers and items on the fly, but we highly recommend importing and/or entering your customer and item records first (a step we also already covered). It’ll make transaction-processing much faster, and there’ll be less stop-and-go.

We also wrote about the new version of QuickBooks Online last month, which is being rolled out in waves to users. We look forward to the day when you’re all using this much-improved user interface, but until the majority of subscribers are there, we’ll continue to describe your accounting activities using the older version. If you’ve already been upgraded, you should still be able to follow along using the new navigational tools. We can help you with the transition either way.

Pitching future sales

If your business uses estimates (sometimes called “quotes”), QuickBooks Online will accommodate this activity nicely. First, make sure that you’re set up to create these forms. Click on Company | Preferences, and then on Sales Form Entry | Estimates. You’ll see something like this:

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Figure 1: QuickBooks Online gives you three options for including estimate information on invoices.

The Estimates box should be checked, and you’ll have to decide whether you want estimate information to appear on customers’ invoices. Be sure to click the Save button in the lower right corner if you’ve made any changes.

To create an estimate, click on Customers | Estimate, then click on the arrow next to the Status field at the top of the form. The drop-down menu displays four options:

  • Pending. You’re creating a new estimate for consideration by the customer.
  • Accepted. Your customer has accepted the estimate.
  • Closed. This can describe one of three situations. You’ve either decided that you’re not going to pursue this product or service, or that you’re not going to bill for it. Estimates are automatically assigned this status when an estimate has been approved and has been added to an invoice.
  • Rejected. The customer has decided not to accept the estimate.

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Figure 2: Be sure that your estimate is filled out absolutely correctly. Though it’s not considered a legal contract, you’re offering your products and/or services at the cost(s) displayed.

Next, select a customer from the drop-down list or click << Add New >> to create a new record. If you want to enter an expiration date for the estimate, there’s a box on the right of the screen that allows this.

In the table below that, you’ll describe the products and/or services you’re offering – and at what price – by selecting from drop-down lists and filling in fields. QuickBooks Online will calculate a running subtotal, and you can add a discount, specify a sales tax agency if needed and add any shipping charges to get your total.

You can enter a message that the customer will see (if you didn’t already compose one in Preferences), and type a memo (which will not be seen by the customer). You’ll check a box to indicate whether the estimate is to be emailed or printed, and you can attach documents to the form if you’d like.

Finally, QuickBooks Online gives you a number of ways to proceed with the estimate, accessible through a row of buttons in the lower right corner.

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As you can see, QuickBooks Online lets you simply copy your estimate information directly to an invoice. You can also just open a new invoice form for the customer, and information about any pending estimates will appear there.

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Figure 4: When you open an invoice form for a customer, you’ll be notified of any pending and accepted invoices.

QuickBooks Online includes a very helpful link at the bottom of this screen: History of changes to this estimate, which is great if you end up going through multiple versions.

As always, please let us know if we can answer questions about estimates – or any other element of QuickBooks Online.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.
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