Putting together an estimate on a QBO can be an important feature for businesses where projects or services involve quoting a price to customers before the recognition of that revenue. This will help you provide your customers with a clear breakdown of products or services and the associated costs. In this post, we will delve into essential steps for how would you create a new estimate in QuickBooks Online and also provide details on saving and sending estimates in QBO.
Once the work or sale is complete, the built estimate can be converted into an invoice, thus making the entire process easier for both you and your client. Estimates in QuickBooks Online: Create and Do It Right- A guide about the steps to follow, the functionalities available, and the best options to properly use estimates within one’s business activity.
What are QuickBooks Online estimates?
QuickBooks Online provides a way for business owners to prepare, manage, and send estimates. An estimate is essentially a quote that provides a breakdown of possible costs of the goods and services your company plans to offer. It is useful in the case of projects where the final cost may not be known, or anytime a customer will need a rough idea of what they will be charged for a service before settling a final agreement.
The elements of an estimate are interestingly diverse, but they generally include the following:
- Customer Information: The name, address, and contact information of the customer.
- Products/Service List: The items or services you are quoting, their descriptions, quantities, unit prices, and total costs.
- Taxes: Indication of sales tax.
- Estimate Total: The total amount before taxes and discounts.
- Terms and Conditions: Particulars of terms that include payment methods, due dates, or other information on the contract.
Estimates prepared in QuickBooks Online are suitable for good organization, proper setting of expectations, and, above all, clear communication between you and your customers. To add a product or service, navigate to Sales, Products, and Services and select New. You can add service type, product type, or other item types.
- Sales Tax: If your business needs to collect sales tax, set up your tax rates correctly. You can add sales tax during estimate creation if needed.
- Estimate Templates: QuickBooks Online provides custom templates for estimates that we can customize according to our choice. For example, you can add a company logo or modify the layout.
Guidelines for Making Estimates within QuickBooks Online
Here are some tips for making estimates that are accurate and look professional:
- Your estimates need to be precise so customers know what is being quoted in labor or items. A clear description and quantity prevent confusion.
- Make sure that your pricing is right and the quantity listed for each item is correct.
- Where appropriate, add any relevant terms and conditions to the estimate (payment terms, duration of delivery, etc.).
- Use a customized estimate template to allow the inclusion of your company logo and formal formatting. This helps present your company in a polished and consistent way to your clients.
Setting Up QuickBooks Online for Estimates
Before designating estimates for customers in QuickBooks Online, there are a few basic steps to ensure the correct initiation:
- Set Up Customers: Make sure customer profiles are made, as this would help bring up details such as the name, billing address, and information about contacts when creating an estimate. Set up a customer by selecting the Sales tab, clicking on the Customers, followed by New Customer.
- Add Products/Services: You must have your products or services created in your QuickBooks account and ready for an estimate. If not previously entered, add them in the Products and Services section in the Sales menu. To add a product or service, go to Sales, then Products and Services, then click New. You will have the option of adding a product, service, or other item.
- Estimate Templates: QuickBooks Online offers customizable templates for estimates. You can amend these templates to your desire, add your company logo, or change the layout.
- Sales tax: If you need to collect sales tax, you will need your tax rates set up correctly. You can add sales tax while creating the estimate if required.
Note: To create or edit templates, go to Settings (gear icon), Custom Form Styles. Prepare the Estimate in QuickBooks Online.
- With preliminary settings: Customer, product/services, taxes, already set in your QuickBooks Online account, you’re up to take an estimate.
Steps for Creating Estimates in QuickBooks Online
Here are some essential steps to create Estimates in QB Online.
Step 1: Access the Estimates
- On the dashboard, the + New button is located in the upper left corner.
- Under Customers, select Estimate.
Step 2: Select the Customer for whom you are creating the Estimates
- If this customer isn’t already in your records, click Add New and enter the customer’s information.
- Select the customer for whom you are making the estimate.
- Should the customer be missing from your system, go ahead and click on Add New, thus adding the customer.
Step 3: Pick the Date of the Estimate for Preparing the Quote
- Estimate Number: QuickBooks automatically assigns a number to each estimate. You can change the number if you like let QuickBooks do it for you.
- Message to Customer: You have the option to enter a note or message showing on the estimate. It could include specific details regarding the project, when it should be delivered, or any other information your client needs to know.
Step 4: Select from the Item Detail Area
- The products or services you wish to include in the estimate. These may be items you have already configured previously in the Products and Services area of QuickBooks.
- You can modify each item regarding quantity, price, and any taxes.
- The total of each line and the estimate’s total are calculated automatically by QuickBooks Online.
- Implementation of Sales Tax, if Necessary, and if sales tax collection applies to your kind of business, ensure that the right rate is applied to your line of items.
- You may choose the tax rate for individual items or otherwise have it calculated automatically according to the tax settings that you set in QuickBooks.
- Once you add all the necessary details, take a look at the estimate and confirm that it is all correct. It should show you item prices, quantities, and totals.
- If everything seems fine, you’re good to go and can send it to the customer.
How to Save and Send Estimates in QuickBooks Online?
You can follow the steps to save and send estimates in QBO:
Save the Estimates
If you’re not ready to send the estimate yet, then click Save and Close to just save it. If you still want to work on it, then click Save and New or press the tab again to go to the next step.
Once you have created an estimate, you can track and manage it easily in QuickBooks Online. Here is the procedure:
- View Estimates: You can see all your estimates if you go into the Sales tab and select Estimates. Here, it will show you a listing of all current accepted and rejected estimates.
- Convert Estimate: An Invoice should the customer approves the estimate, the customer can easily convert it into an invoice. Open the estimate from the Estimates tab. Click Create Invoice.QuickBooks carries all the details from the estimate to the invoice. You could adjust quantities or prices ahead of sending it over to the customer.
Send to Customer
When you’re ready, click Save and Send so the estimate can be directly sent to the customer through email. You can include a personalized message in the email before sending it. Otherwise, you can choose Print or Preview if you want to print it out or send it manually.
Note: Check the Status of Estimates. QuickBooks Online helps you track the status of your estimates.
- Open: The estimate is still in progress or waiting for approval.
- Accepted: The customer accepts the estimate, so that you can now proceed with the work or sale.
- Closed/Declined: Either canceled or declined by the customer.
Conclusion
There are no hidden complexities in creating an estimate in QuickBooks Online, it takes you around managing customer expectations and seamlessly transferring the operations from quoting to invoicing. Following the above steps with best practices, you will succeed in making your estimates clear, professional, as well as accurate, and well-managed, whether you are running a small or large organization. QuickBooks Online will save time and increase efficiency in your operations.
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