If your business provides quotes or proposals before starting a job, the Estimates feature in QuickBooks Online can help you manage and convert those into actual invoices once approved. This function is especially helpful for service-based businesses, contractors, consultants, or any business where pricing may be reviewed before work begins.
Why Use Estimates in QuickBooks Online?
Estimates allow you to send a non-binding quote for services or products. They help avoid misunderstandings with customers about scope and pricing. Once accepted, an estimate can be converted into an invoice with just a few clicks—saving time and reducing errors.
How to Create an Estimate
• Click on ‘+ New’ from the left navigation menu.
• Select ‘Estimate’ under the Customers section.
• Choose the customer or add a new one.
• Set the Estimate Date and Expiration Date (optional).
• Enter the details of the products or services including quantity, rate, and any applicable tax.
• Customize the message, attach documents if needed.
• Click ‘Save and send’ to email it to your customer or ‘Save and close’ to keep it in draft.
Tracking and Managing Estimates
QuickBooks Online tracks the status of each estimate so you know whether it’s pending, accepted, closed, or rejected. You can view all estimates by going to the ‘Sales’ tab and clicking on the ‘Estimates’ section.
Statuses can be updated manually, and you can filter or search by customer, date, or estimate number to quickly find what you need.
Converting an Estimate to an Invoice
Once your customer approves the estimate, you can convert it into an invoice without re-entering the information:
• Go to ‘Sales’ > ‘Estimates.’
• Locate the estimate you want to convert and open it.
• Click on ‘Create Invoice’ at the top.
• Choose whether to invoice for the entire estimate or a portion of it (useful for progress billing).
• Review and send the invoice to the customer.
Best Practices When Using Estimates
• Use expiration dates to create urgency and ensure prices stay current.
• Add custom fields for job reference, project phase, or internal tracking.
• Keep notes about any customer communications within the estimate.
• Use the ‘Reports’ section to review estimate-to-invoice conversion ratios or follow up on pending approvals.
Conclusion
Estimates are a powerful tool for setting expectations and streamlining the sales process. By mastering how to create, manage, and convert them into invoices, you can improve your client communication and reduce administrative work. QuickBooks Online gives you the flexibility and tracking needed to stay organized and efficient.
Please Note:
• QuickBooks Online has different versions (e.g., Simple Start, Essentials, Plus, Accountant). Some features or menu labels may vary slightly depending on your subscription level.
• QuickBooks Online is regularly updated by Intuit. Features, menu labels, and workflows described in this post may change over time. Always refer to the latest guidance within your QuickBooks account or consult a professional for current information.
If you require additional assistance with QuickBooks, please feel free to contact us.