Working with estimates and purchase orders in QuickBook Online

 Overview of estimates and purchase orders

Estimates are a type of transaction that clients may send to their customers to provide an indication of the cost of their product or service. QuickBooks Online allows clients to record estimates and easily monitor the progress of the transaction. This feature also allows clients to transfer details to purchase orders, which can then be used to order goods from vendors. Additionally, this workflow can also be used to create invoices for billing purposes. Using the estimate workflow can save time and reduce the risk of errors as clients do not have to manually enter information when creating purchase orders and invoices. Once the invoice is saved, the amounts will be posted as transactions in the financial reports. Clients can even mark the estimate as closed, which can help streamline the overall process.

Creating an estimate

Let’s see how to create an estimate. 

1.     From the left-hand navigation, select Sales, then All Sales  

2.     Next, select New transaction and then Estimate 

3.     From the Customer dropdown, select the customer the estimate is for 

4.     Set the Estimate date and the Expiration date. In our case, we set the Expiration date two weeks from the Estimate date

5.     In the Product/Service column, enter the details of the job

6.     Adjust the Quantity and Rate if needed

7.     Next, select Save and send 

8.     Review the estimate and the content of the email in the Send email screen. When ready, select Send and close 

That’s it. QuickBooks Online will send the email with the estimate to the customer. 

Enabling purchase orders

Clients using QuickBooks Online Plus or Advanced can create a purchase order using an estimate. However, before they do this, they need to enable that option. 

To do that, follow these steps:

1.     From the Gear icon, select Account and Settings

2.     Next, select the Expenses tab

3.     In the Purchase orders section, move the Use purchase orders slider to switch it on

1.                       When done, select Save and then Done

Using an estimate to create a purchase order 

Once the purchase order option is enabled, clients can create a purchase order using an estimate.  

1.     From the left-hand navigation, select Sales, and then All Sales

alternatively, navigate to the Customers tab of the Sales center.

2.     On the money bar, select the Estimate box

3.     Select the estimate to be turned into a purchase order 

4.     On the Estimate screen, use the Estimate status dropdown to update the status of the estimate and add any details

Note that there are four different status types for estimates in QuickBooks Online: Pending, Accepted, Closed, and Rejected. 

 

5.     To save the changes to the estimate status, select Save

6.     Next, select the down arrow next to Create invoice and select Copy to purchase order 

7.     On the Purchase Order screen, select the Vendor to order the item from  

8.     In the Ship to dropdown, select the customer whose project the item is for and who the estimate was created for 

9.     Review and adjust any details as necessary

10. When done, select Save and send

11. Review the content of the email with the purchase order and when ready, select Send and close 

The purchase order is now sent to the vendor. 

Converting a purchase order to an expense or bill

Once the vendor delivers the item, your client can add the purchase order to a bill or expense, depending on how they’d like to pay for it. 

To do that, follow these steps: 

1.     From the left-hand navigation, select Expenses, then Vendors  

2.     On the money bar, select the Purchase Order box  

3.     Find the purchase order and select either Create bill or Create expense from the down arrow

Note how some details are pre-filled. Enter any missing details. 

4. From the drawer on the right, select Add to add the details of the purchase order 

to the expense.

5. When done, select Save and close 

Converting an estimate to an invoice 

Finally, let’s see how to bill the customer when the job is complete. 

1.     From the left-hand navigation, select Sales, then Customers 

2.     Select the Estimate box in the money bar

3.     Find the right customer and select Start invoice in the Action column 

4.     Review the details, including the due date

5.     From the drawer on the right, select add to add the details of the estimate to the invoice

If necessary, clients can change the quantity and price on the invoice.

6.     Select Save and send

7.     Review the invoice and the content of the email in the Send email screen. When ready, select Send and close  

The estimate will automatically be marked as closed even if only partial quantities are added.

That’s it!