QuickBooks Online Progress Billing Explained: Invoicing for Project Based Businesses

Did you know that using progress invoicing in QuickBooks Online can really help your cash flow? It lets businesses get payments as they go, not just when the project is done. This is super helpful for big, complex projects.

With QuickBooks Online progress billing, you can send out partial invoices. This way, you don't have to worry about one big invoice at the end. It makes managing your projects and sending invoices easier.

Key Takeaways

• Progress billing allows incremental invoicing, improving cash flow.
• You can split estimates into multiple invoices for ongoing projects.
• Special setup is required to enable progress invoicing in QuickBooks Online.
• A specific template is needed for progress invoicing, enhancing organization.
• Real-time tracking of due balances can be achieved through adjustable line items.
• Reports like the Estimates & Progress Invoicing Summary by Customer can help you monitor progress.

What is Progress Billing in QuickBooks Online?

Progress billing lets you break down a project's cost into smaller parts. This makes it easier to bill based on project milestones. In QuickBooks Online, you can create multiple invoices after getting client approval. These invoices cover costs for materials and labor as they happen.

The progress billing definition shows how you can charge a percentage or a specific amount in each invoice. This method helps with cash flow and builds trust with clients by being open about billing.

• Three invoicing options in QuickBooks include:
  
  • Total of all estimate lines (one invoice for total estimate)
  • Percentage of each line item (e.g., invoicing 25%)
  • Custom amount for each line

QuickBooks billing solutions make it easy to create invoices without linking them to an estimate. This flexibility helps in handling many tasks or client requests at once.

QuickBooks' reporting features improve your invoicing strategy. The “Estimates & Progress Invoicing Summary by Customer” report shows the status of each estimate and invoiced amounts. As invoices are created, they help track project progress and client communication. This highlights the benefits of progress billing.

How to Turn on Progress Invoicing in QuickBooks Online

To start using progress invoicing in QuickBooks Online, just follow a few easy steps. This feature lets you send out partial invoices from one estimate. It's great for long-term projects. Here's how to turn it on, create a custom invoice template, and estimate costs.

Step 1: Enable Progress Invoicing

Before you can create progress invoices, you need to enable this feature in QuickBooks Online. Here’s how:

1. Log into QuickBooks Online.
2. Click on the Gear icon in the upper-right corner.
3. Under the Settings menu, select Account and Settings.
4. In the left-hand menu, click on Sales.
5. Scroll down to the Progress Invoicing section.
6. Click Edit (pencil icon) on the right.
7. Toggle Progress Invoicing to On.
8. Click Save, then Done to apply the changes.

Now, you’re ready to create progress invoices based on estimates.

Step 2: Create a Progress Invoice Template

To ensure your progress invoices look professional and contain the necessary details, you should create a customized template.

1. Click on the Gear icon again.
2. Select Custom Form Styles.
3. Click the New style button and choose Invoice.
4. Under the Content tab, click on the Header section and add fields like Estimate Number to reference the original estimate.
5. In the Activity Table section, ensure that the "Show progress on line items" option is enabled.
6. Under the Design tab, customize fonts, colors, and logos to match your branding.
7. Click Done to save your invoice template.

Step 3: Make a Cost Estimate

An estimate helps you break down the total cost of a project, which can then be billed in stages using progress invoicing.

1. Click on the + New button on the left sidebar.
2. Select Estimate.
3. Enter the Customer Name.
4. Add Product/Service Items for each stage of the project.
5. Enter the quantity, rate, and total price for each item.
6. Once the estimate is complete, click Save and Close or Save and Send to share it with your customer.

Once the estimate is approved, you can convert it into progress invoices.

Step 4: Creating Progress Invoices from the Estimate

After you’ve set up an estimate, you can generate progress invoices based on the percentage or a specific amount.

1. Go to the Sales menu and select Estimates.
2. Locate the estimate you created and open it.
3. Click the Create invoice button.
4. Choose one of the following options:
   
   • Invoice for a percentage of the total estimate (e.g., 30%, 50%).
   • Invoice for a specific amount per line item.
   • Invoice for the remaining balance.
5. Review the generated invoice and make any necessary adjustments.
6. Click Save and Send to share it with your customer.

This process can be repeated multiple times until the full amount of the estimate has been billed.

Step 5: Keeping Track of Your Progress Invoices

Since progress invoices are billed in stages, it’s important to track them properly.

1. Go to the Sales menu and click on Invoices.
2. Use the Filter option to view invoices linked to a specific estimate.
3. Click on an estimate to see how much has already been invoiced and what remains.
4. Run a Progress Invoicing Summary Report by navigating to Reports > Progress Invoicing Summary by Customer.

This ensures you stay on top of your project billing and avoid over- or under-invoicing.

How Progress Invoicing Works for a Roofing Company in QuickBooks

A good example of this progress billing concept can be in the roofing industry. Roofing projects often span several weeks or months, requiring multiple payments throughout the job. Instead of invoicing the customer only at project completion, progress invoicing (or progress billing) allows a roofing company to bill in stages. This ensures steady cash flow while keeping invoices connected in a threaded manner, making it easy to track payments against the total project cost.

How It Works in QuickBooks for a Roofing Project

1. Create an Estimate for the Full Project
   
   • Start with a detailed estimate in QuickBooks for the total project cost.
   • Example: A roofing job is estimated at $20,000.
   • Include labor, materials, permits, and any additional fees in line items.
2. Convert the Estimate into a Progress Invoice
   
   • Instead of invoicing the full $20,000 upfront, you create multiple progress invoices.
   • QuickBooks allows you to invoice a percentage, a fixed amount, or specific line items from the estimate.

Example of Progress Invoices for a Roofing Job

Each invoice is linked to the original estimate, so you can track how much has been billed and what’s still outstanding.

Why This is Useful for a Roofing Company

QuickBooks progress invoicing helps roofing companies in a few ways:

• Keeps Invoices Connected (Threaded) – Each invoice is linked to the estimate, making it easy to track total payments.
• Improves Cash Flow – Instead of waiting until project completion, you get paid at key milestones.
• Reduces Customer Disputes – Since customers see the detailed estimate and progressive invoices, they understand what they are paying for.
• Prevents Large Outstanding Balances – You collect payments in smaller, manageable amounts rather than chasing one large final payment.

Set Up Progress Billing with DepositFix and QuickBooks

Using DepositFix with QuickBooks integration makes managing progress billing easier. It helps handle deposits and progress payments better, which improves cash flow. DepositFix makes sending invoices and asking for deposits automatic.

DepositFix and QuickBooks together cut down on data entry mistakes by 80%. This means you can spend less time on paperwork and more on growing your business.

Also, using this combo can boost cash flow by 30%. It makes getting paid faster. Coaches and consultants see payments come in 50% quicker than usual. This means you get money sooner and your clients are happier with the billing process.

To sum up, here are the main benefits of using DepositFix with QuickBooks:

DepositFix in QuickBooks takes your progress billing to the next level. It makes invoicing smoother, boosting your efficiency and financial health.

Conclusion

Using progress billing in QuickBooks Online can really help with client invoicing. Many small to medium-sized businesses struggle with cash flow, with almost 50% facing issues. Progress billing lets you bill clients as you work, improving cash flow and keeping clients informed.

QuickBooks Online makes billing easier and fits different project needs. This includes industries like construction, software development, and real estate. With like DepositFix, you follow best practices for invoicing. This helps manage client expectations and finances better.

With the QuickBooks Online features, your business can handle complex projects well. You'll have a clear payment process, helping you deal with long-term project challenges. This keeps your finances stable as projects change.

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