QuickBooks Progress Invoicing: Bill Smarter, Not Harder!

As an entrepreneur, you understand how tough it is to deal with billing, especially when you're invoicing a client for multiple projects or services over time. It's a hassle, and it gets even worse when you find out that almost 39% of invoices in the US are paid late.

Getting paid on time is crucial for success. But waiting until the end of a long project to get paid in full can cause cash flow problems, stress, and financial trouble.

That's where QuickBooks Progress Invoicing comes in. This feature helps you manage billing more effectively, and in this article, we'll break down how it works in QuickBooks Online.

But first, let's take a closer look at what progress invoicing is all about.

Progress Invoicing Explained: Breaking Down the Basics

Businesses are sometimes hired for a specific task or project, finish the work, and then submit an invoice to the client for payment. However, this strategy might not work for every business. Larger, longer-term projects may have severe cash flow problems if payments are not made until the project is finished. This is the situation where progress invoicing is useful.

Progress invoicing, or QuickBooks progress billing, is gradually billing a client for accomplished work. This implies that rather than receiving a single, complete payment after a job, you will receive several smaller payments throughout the project. 

You can maintain your cash flow and start receiving payments sooner.

You must first work with your client to create and approve an estimate before you can send progress invoices. After that, a QuickBooks progress invoice will be generated based on this progressive estimate. With every progress invoice you issue, you have the option of charging a fixed percentage or a portion of the estimate.

How does it work?

Step 1: Enable progress invoicing QuickBooks 

Before you can begin sending progress invoices in QuickBooks Online, you must first enable this feature. Progress invoicing QuickBooks Online is available in the Simple Start, Essentials, Plus, and Advanced plans.  

Follow these steps to enable Progress Invoicing:

• Go to Settings and then Account and Settings.
• Go to the Sales tab.
• Select Edit in the Progress Invoicing section.
• Select the Create multiple partial invoices from a single estimate checkbox.
• Select Update from the Update your Invoice Template window.
• Choose Save, then Done.

You can now generate multiple invoices from your estimates.

Before you enable progress invoicing, make sure you have created templates for each type of service or product you provide. This will allow you to create progress invoices for your clients quickly and easily.

Step 2: Make invoice templates

Once progress invoicing is enabled in QuickBooks Online, you can design a personalized progress invoice template. To do this, follow these steps:

• Navigate to Custom form styles under Settings (gear icon).
• Select Invoice under New Style.
• Give the template a catchy name, like "Progress invoice template," to make it memorable.
• Click Change up the template or Dive in with a template.
• Select the Airy new template.
• Click Edit on the table section of the form (the second section with Activity, Rate, and Amount).
• Click Show More Activity Options.
• Select Show Progress on Line Items checkbox to show item details on the progress invoice.
• Click Edit on the footer section of the form.
• Select Estimate Summary checkbox if you want the invoice to show the estimated amount, the individual progress invoice amounts, and the total amount invoiced so far.
• Click Done.

To add your template as the default template:

• Go back to Custom form styles.
• In the Action column, click the dropdown menu next to the template. Then select Make default.
• Click Change template to confirm your choice.

Note: If you want to use this template for a few progress invoices, you can keep a different default template for your regular invoices. Then, as you're creating a new invoice, you can utilize the progress invoice template by selecting Customize directly on the invoice form.

Tips:

• Every time you create a progress invoice, you can utilize the pre-made Airy classic style template.

• If you send many progress invoices, we recommend making this your new invoice template.

Step 3: Create an estimate

You need an estimate to bill against before beginning QuickBooks progress invoicing. You can start progress invoicing as soon as you and your client have finalized the terms of the pricing agreement and you have generated an estimate in QuickBooks.

Follow these steps to create an estimate in QuickBooks:

• Click + New and select Estimate.
• Choose your customer and enter the items and services you will be offering.
• Click Save and new, Save and close, or Save and send.

Tip: When using the Projects feature, enter your estimate before creating progress invoices. If you do not want your client to see the precise phases of the job you were hired to complete, you might want to enable a "Bundle" item on your estimate. Similar to group items in QuickBooks Desktop, bundle items are helpful when you need to conceal information from customers on sales documents.

Step 4: Utilizing the estimate, create progress invoices

Progress invoices can be generated in two different ways:

Method 1:

• Go to Sales > All sales.
• Find the estimate you want to create a progress invoice for.
• Click Create Invoice in the Actions column.
• Decide how much you want to invoice for and select Create Invoice.
• Fill out the invoice and click Save and New or Save and Close.

Method 2:

• Click + New and select Invoice.
• Select your client from the dropdown menu. If the client has an open estimate, QuickBooks Progress Invoicing will open the Add to Invoice sidebar.
• Select the estimate in that sidebar and select Add.
• Choose how much you want to invoice for and select Copy to Invoice.
• Fill out the invoice and click Save and New or Save and Close.

Step 5: Select an amount

When you enable progress invoicing in QuickBooks Online and click the "Create Invoice" button, a popup window will appear, prompting how much you want to invoice.

You have three choices:

• Total of all estimate lines: This will bill your customer for the entire estimate amount.
• Percentage of each line: This will charge your customer a percentage of each estimate line. In the popup window, enter the percentage you want to invoice for.
• Custom amount for each line: This will bill your customer for the amount specified for each line on the estimate.

The option you select is determined by how you want to progress invoice your customer.

For instance, you would choose the "Percentage of each line" option and input 25 in the popup window if you wanted to bill your customer for 25% of the entire estimate amount.

Alternatively, you could choose to select the "Custom amount for each line" option and enter 1000 and 500 in the popup window if you wanted to bill your customer $1000 for the first phase of the project and $500 for the second.

Step 6: Customize the invoice to show your progress

You must enable certain features in the "Customize Invoice" window if you want your clients to view the progress you have made on a project when they receive your progress invoice.

• In the Customize Invoice window, on the Design tab, uncheck the box next to Fit printed form with paystub in a window envelope.
• On the Content tab, click on the Footer section and check the box next to Estimate summary (email and web only).
• Also, on the Content section, click on the Target Section under the Invoice Layout and check the box against "Show progress on line items (email only).
• Click Save and New or Save and Close to save your changes.

Your progress will now be visible to your client in the lower right corner of the progress invoice when they receive it via email.

To see how far you have come:

• The invoice and estimate both have a view-ahead section showing your progress. 
• Another report you can run is Estimates & Progress Invoicing Summary by Customer. This report will display every project your company has undertaken at every stage of development.

To monitor your development using the report:

You can use the % Invoiced column to show you what percentage of the job is finished and how much is left if the percentage you invoice for and the percentage of the project you have completed are directly correlated.

The status of the estimate will become "Closed" after you have invoiced for the entire estimate.

Step 6: Examine the estimate

To view all of your progress invoices on the original estimate:

• Go to Sales > All sales.
• Find and open the estimate.
• Click the blue linked transaction(s) to see the invoices you've already created.
• Review progress invoices

To examine a progress invoice:

• Go to Sales > All sales.
• Find and open the progress invoice.
• The progress invoice will include an estimate summary with the total invoiced. There will also be links to the original estimate and all relevant progress invoices.

Tip: Include estimate summaries in invoices so customers can see their remaining balance. This is disabled by default.

Step 7: Review projects

When you add estimates to projects, everything is visible in the Transactions tab of the project page.

Step 8: Run reports

To run a report on all of your estimates and connected progress invoices:

• Go to Reports.
• Search for and open the Estimates & Progress Invoicing Summary by Customer report.

Disclaimers

You will continue to generate progress invoices until you have invoiced for the entire estimate and the job is finished. If you estimate $10,000, you could send three progress invoices of $3,333.33 each.

You cannot invoice for more than the total estimate. QuickBooks will only allow you to invoice for the remaining balance if you try. If you need to bill more than the estimate, you must consult your client and revise the estimate. You can invoice for the additional amount once you have updated the estimate.

Why outsource QuickBooks Progress Invoicing?

Virtual Assistants can take up much of your invoicing load and use QuickBooks Progress Invoicing to your best use.

Tailored Configuration

Remote bookkeepers can configure your QuickBooks account to meet the unique needs of your company. This includes configuring industry-specific settings, tax requirements, payment terms, and invoice templates. They ensure that using and navigating your QuickBooks account is simple and easy for you. This configuration increases overall process efficiency and lowers the probability of errors.

Stay On Top of Progress

These professionals closely monitor the development of ongoing tasks or projects. They keep a close eye on all expenses, materials used, and finished work. This guarantees that the project's current status is appropriately reflected in the progress invoice. They keep thorough records of every action of the project. This entails recording expenditures, deadlines, and modifications to the project's scope. These documents are essential for producing accurate invoices.

Flawless Invoicing

The assistants are in charge of accurately creating progress invoices in QuickBooks. They guarantee that every invoice fairly represents the labor performed, supplies utilized, and related expenses. Invoices include itemized details of the services provided and materials used, allowing clients to understand the billing breakdown clearly. They calculate applicable taxes to ensure that your invoices are tax-compliant.

Mastering Invoicing Logistics

Online assistants also oversee the promptness of billing. As the work is completed, they create and send progress invoices to the clients. This practice helps maintain a consistent cash flow. They handle invoice-related client communication. This includes sending invoices and following up with clients to confirm receipt and address any questions or concerns they may have.

Efficient Payment Management

They monitor progressive payments online. They keep track of these payments in QuickBooks, so you always have the most recent information about your receivables. By sending out reminders for past-due payments, they lower the possibility of unpaid invoices and support preserving a stable cash flow.

Effortless Reconciliation

These assistants use QuickBooks to match received payments to the relevant invoices. By following this procedure, you can be sure that your financial records accurately reflect your current financial situation and that any outstanding payments are simple to locate.

Insightful Reporting and Analysis

They provide reports that shed light on the status of your invoicing procedure. This enables you to base business decisions on data and make well-informed choices. It includes cash flow projections, outstanding payments, and general financial health.

Efficient Record-Keeping

By making sure that all project-related data, client information, and financial transactions are accurately entered into QuickBooks, the assistants lower the possibility of mistakes and inaccuracies. To ensure regulatory compliance, accurate data entry is essential. Virtual assistants assist you in keeping these records updated to comply with legal requirements. By keeping your records current, they make it simple to obtain critical financial data when needed.

Streamlined Automation

They can set up integrations with other software or tools to streamline the invoicing process and make it more efficient. To ensure consistency and efficiency, they automate routine tasks such as sending payment reminders.

Courteous Client Communications

Online bookkeepers communicate with clients professionally, ensuring they are treated respectfully and courteously. They respond to any questions or concerns clients may have about invoices and payments by providing precise and helpful answers. Effective client communication fosters positive relationships, resulting in repeat business and client loyalty.

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Key Takeaways

All businesses can benefit from QuickBooks progress invoicing, but those engaged in lengthy or complex projects will find it especially beneficial. These projects may strain a company's cash flow since they frequently require a sizable initial time and resource commitment.

But you can sigh in relief as you don't have to be alone in this! Sit back and let our virtual assistants handle it. Contact our experts via free consultation or mail us at [email protected].