How to Create Estimates in QuickBooks
Whether you sell products or services, you may need to create estimates in QuickBooks Online. Here’s how it’s done.
It would be nice if you could just instantly invoice every sale. But sometimes your customers need to know what a particular purchase will cost before they make the decision to buy. So you need to know how to create an estimate. If the sale goes through, you’ll of course want to send an invoice.
QuickBooks Online automates this entire process. It even helps you track the progress of your estimates by providing a special report. Here’s how it works.
Just Like An Invoice – Almost
The process of creating an estimate in QuickBooks Online is almost identical to creating an invoice. You click the New button in the upper left and select Estimate.
When the form opens, you’ll notice one difference right away. Directly below the Customer field, you’ll see the word Pending next to a small down arrow. Click it to see what your options are here. You’ll be able to update its status later. Select a Customer to get started. If this is a new customer, click + Add New and enter at least the name. If you want to build a more complete profile at this point, click Details and complete the fields in the window that opens. To send a carbon copy or blind copy of the estimate to someone else, click the Cc/Bcc link.
Next to the Estimate date, there’s a field for Expiration date. Enter that and continue on to add the products and/or services that will be included, just as you would on an invoice. If you’re generating an estimate for a new product or service, click + Add new in the drop-down list. A panel will slide out from the right that allows you to create one.
You’ll see more options for your estimate at the bottom of the page. You can add a message in the message box (or leave the default message if there is one). You can also Customize it, Make recurring, or Print or Preview it. When you’re satisfied, Save it, and send it to the customer.
Updating the Status
Your estimate will not be considered a transaction until you accept it. To do this, click the Sales link in the toolbar, then All Sales. Find your estimate in the list by looking in the Type column. Click the down arow next to Create invoice to see your other options there. You’ll see that you can Print or Send it or save a Copy.
Click Update status. In the window that opens, click the down arow next to Pending. From the list that drops down, select Accepted. You can also mark it Closed or Rejected. If you choose any of the last three options, another window opens that allows you to enter the name of the individual who authorized the action and the date it was done.
Click Create invoice if your estimate was accepted. You’ll have three options here. You can invoice your customer for:
- The estimate total.
- A percentage of each line item.
- A custom amount for each line.
After you’ve made your selection, click Create invoice to open the form with the amounts filled in based on your preference. Complete anything that’s unfinished but do not change any of the product or service line items. Save it, and your invoice is ready to go. You can always check the status of your estimates by running the Estimates by Customer report.
Creating and tracking estimates is as easy as working with invoices. You may run into difficulties, though, if you need to do anything beyond that point with estimates, such as modifying it and re-submitting them. I’m here to answer any questions you might have about this. It’s important that you get your estimates and their subsequent invoices exactly right, so you don’t lose money or sales. Book a session with me if you want to go over these concepts.