How to Delete Unbilled Expenses in QuickBooks

QuickBooks, the popular accounting software developed by Intuit, offers robust features for managing business finances. One crucial aspect of financial management is handling unbilled expenses.

This guide provides detailed information on understanding, managing, and deleting unbilled expenses in QuickBooks, ensuring efficient financial record-keeping for your business.

Understanding Unbilled Expenses

Unbilled expenses represent activities intended for client billing but not yet added to a stored invoice. These include:

1. Charges
2. Credits
3. Billable Expenses
4. Time Charges

Unbilled expenses are also known as non-posting transactions. They don’t appear in report totals and don’t affect the customer’s owed balance or the accounts receivable balance.

QuickBooks allows users to indicate that a recurring invoice should collect any unbilled charges present when the transaction is produced. This feature is particularly useful for billing customers for charges not regularly included in the invoice template, such as one-time fees.

Steps for Changing Unbilled to Billed Expenses

Follow these steps to convert unbilled expenses to billed expenses:

1. Navigate to the plus icon.
2. Click on the “Customer” tab.
3. Select “Invoice” from the customer dropdown menu.
4. Enter the billable customer’s name in the name field.
5. Add the billable time charge visible on the right side of the page.
6. Click “Save” to store the changes.
7. Exit the screen by clicking the “Exit” button.

Steps for Deleting Unbilled Expenses

QuickBooks offers a straightforward method to delete unbilled expenses:

1. Click the Edit icon at the top of the screen.
2. Select “Preferences” from the Edit menu.
3. Navigate to the “Time and Expenses” tab.
4. Choose “Company Preferences” from the menu.
5. Uncheck all marked expenses in the billable box.
6. Click “OK” to save the changes.

Deleting a Customer with Unbilled Charges

Deleting a customer with unbilled charges can sometimes result in an error message stating: “This customer cannot be deleted because there are outstanding charges for this customer.” This error occurs under specific conditions:

1. Detailed tracking of customer costs and items is enabled, but billable items and expenses preferences are disabled.
2. The customer you’re attempting to remove has no invoice associated with any charge, credit, or billable expense.

Steps for Checking Bills and Expenses Preferences

To ensure proper settings for managing unbilled expenses:

1. Go to Settings and select “Account and Settings.”
2. Click the “Expenses” tab in the left menu.
3. Verify that the following options are enabled under Bills and Expenses:
   • Tracking of expenses and items by customers
   • Billing all expenses and purchases
4. If these options are not enabled:
   • Click the “Edit” button.
   • Select the checkboxes for tracking expenses and items by customer and making them billable.
   • Click “Save” to apply the changes.

Steps for Managing Customer Charges, Credits, or Billable Expenses

After enabling expense tracking and making items billable in your company settings, you have several options for managing unbilled charges associated with a customer you want to remove.

Creating Invoices for Charges or Credits

1. Navigate to Bookkeeping > Transactions > All Sales.
2. Locate an outstanding credit or charge.
3. Check the box next to the item and select “Create Invoice.“
4. Review the created invoice and click “Save.”

Removing Charges or Credits

1. Go to Bookkeeping > Transactions > All Sales.
2. Open the charge or credit on the report.
3. Click the “More” button and select “Delete.”
4. Confirm the deletion by clicking “Yes.”

Managing of Charge of Customer Billable Expenses

For open billable expense charges, you can create an invoice, mark it as non-billable, or delete it.

Creating an Invoice for a Billable Expense

1. Navigate to Bookkeeping > Transactions > All Sales.
2. Locate the current billable expense charge.
3. Select “Create Invoice” and click “Save.”

Marking a Transaction as Non-Billable

1. Go to Bookkeeping > Transactions > All Sales.
2. Open the Billable Expense Charge.
3. Find the billable amount under the item details.
4. Remove the customer name from the Customer/Project column and uncheck the Billable column.
5. Review changes, save, and exit.

Deleting a Billable Transaction

1. Navigate to Bookkeeping > Transactions > All Sales.
2. Open the Billable Expense Charge.
3. Select the bill marked as billable.
4. Click “More” and choose “Delete.”
5. Confirm deletion if prompted.

Batch-marking Billable Expenses Without Issuing Invoices

This feature is available in QuickBooks Online Plus and Advanced versions:

1. Replace “qbo.intuit.com/app/homepage” with “qbo.intuit.com/app/managebillableexpense” in the address bar.
2. Enter the correct date and click “Save.”

This action affects Unbilled Expense charges but not Unbilled Time charges. QuickBooks will close the Unbilled Charges and mark them as closed without creating an invoice.

Impact of Paying Unbilled Amounts

Paying unbilled amounts in advance can help avoid payment delays and rising interest rates. However, it’s important to note that defaulting due to payment delays can negatively impact your credit health report.

Understanding Unbilled Receivables

Unbilled receivables represent revenues that have been recorded and accounted for but not yet invoiced to the customer. This situation is common in SaaS companies due to the limitations of subscription models.

Common Causes of Unbilled Receivables

1. Billing Delays: Payments made within the invoiced period after a regular billing date.
2. Advance Payments: When clients make manual payments on their accounts before an invoice is generated.
3. Contractor Payments: Work performed before project completion or milestone achievement, where invoices are typically generated upon completion.

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