How Do I Record Bill For Subcontractor Services

Last Updated: Sabbatum, July 30, 2011

Sometimes we all need a hand on a project. If you rent subcontractors for a customer job, you lot can track the income and expenses for work performed by subcontractors in QuickBooks. Outset you prepare up service items for the work your subcontractors perform and indicate that each item represents subcontracted piece of work. In one case yous've set upwards the items, you lot tin can pay your subcontractors and pass on subcontracted expenses to your customers.

Setting upwardly items for subcontracted work

Setting up items specifically for subcontracted work helps you lot manage your books more effectively. When yous employ these items, QuickBooks records expenses and income for subcontracted piece of work in separate accounts. Then y'all can create reports that evidence the profitability of subcontracted work to your business.

Create a new item by choosing Lists > Items and click the + at the bottom of the listing.
In the New Item window, cull Service from the Type list.
Select the "This service is performed by a subcontractor" checkbox.
Enter descriptions for purchasing and sales. QuickBooks uses the Buy description for purchasing transactions and the Sales Description for sales transactions. Y'all tin enter a different description for each or go along them the same.
Enter an expense account for tracking the cost of this subcontracted work and an income account for tracking sales to a client.
Enter a cost and a sales toll.

If your costs vary, you can go out either or both prices as 0.00.
If you have set a standard markup percentage (choose QuickBooks > Preferences and and so click Sales & Invoicing, and then enter a number for Default Markup Per centum), QuickBooks uses information technology to summate the sales toll when you enter the cost. To set a dissimilar sales price for the item, edit the calculated amount.

Now that your items are gear up, you are fix to pay subcontractors when they do work for you.

Paying subcontractors

When you pay a subcontractor who does work for you, enter the payment to the contractor in QuickBooks using the item you set upwards for the subcontracted work.

If you paid the contractor by check, user Write Check in QuickBooks to record the payment. Or, if the contractor sent yous an invoice, you tin can use Enter Bills and Pay Bills to tape the pecker and your payment.
In the top role of the form, fill in the proper noun of the subcontractor and the date.
At the lesser of the grade, click the Items tab.
In the Item column, enter the service particular yous gear up for this blazon of subcontracted work.
In the Cost cavalcade, cheque the amount QuickBooks filled in. If the toll is incorrect for this chore, change information technology.
In the Qty column, enter the appropriate quantity. For example, if the subcontractor charges an hourly rate, you would enter the number of hours. If the Qty column doesn't apply to this work, leave information technology blank.
In the Customer:Chore column, enter the name of the chore (or client) for which the piece of work was done.

Information technology's important that you enter the customer:job proper name. You'll be able to invoice the customer for the work later. Likewise, y'all'll exist able to create reports that show your costs and revenue from the piece of work.

Invoicing customers for subcontracted work

Now you're ready to invoice you client for the work your contractor did.

Create an invoice for the customer:job.
Because you lot've entered your payment to the subcontractor and included the client:job name, when you lot select the customer:task proper name, QuickBooks tells y'all that you accept billable time/costs for this customer.
Click Time/Costs and get to the Items tab.
In the Utilise column, select the service items for the subcontractor's work. QuickBooks adds a bank check mark next to each particular you select. The check mark indicates that the cost volition appear on the invoice.
(Optional) If y'all desire the costs you selected to be summarized in a single line item when you print the invoice, select the "Print selected time and costs as one invoice particular" checkbox. When you view the invoice on your screen, you'll see a separate line for each cost; when you print the invoice, only the total for the entire group of costs appears. Important: Practise this only if yous are certain you want the printed invoice to show simply the total of the costs (and not a line past line listing of each price). One time you record the invoice, you volition not be able to print the costs separately.
Click OK to return to the invoice.
Make whatever needed changes or additions to the invoice and sent it to your customer.

And then that'south it

And that's how you track subcontractor expenses in QuickBooks. Considering yous assigned the cost of the contractor to a customer:job, they are included in any job-related reports, then you'll have an accurate view of how much a task costs y'all.