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How to Build an Empire with Cloud Accounting – Invoicing

‘How to Build an Empire with Cloud Accounting’ sets its sights on Intuit’s QuickBooks App, with a Four-Part Series breaking down the functionality of the App into streamlined, repeatable steps to realize the advantages of cloud-based accounting solutions for your business. At Strata-G, we are a Xero firm who also appreciate the opportunity to partner with QBO clients. Stay tuned for helpful guides for Xero Apps.

How to Build an Empire with Cloud Accounting

QuickBooks App: INVOICING – Part 2 of 4

In the second installment of this 4-part series, we dive into the world of Invoicing to explore some essential, time-saving features that Intuit has built into the QuickBooks App, while increasing your company’s cash-flow as a direct result of the streamlined, cloud-based functionality.

Before we get started, this article makes the following assertions:

PART II: Invoicing

Query

I have always manually invoiced and typically get paid, why should I consider an online approach?

There are many benefits to invoicing through a cloud-based accounting program such as QBO, the culmination of which is to get you paid faster, while reducing errors. Within this article we provide time-saving steps to invoice accurately, while layering in the following benefits of invoicing through
QBO:

Strata-G Tax - Quickbooks App - Step by step guide - Invoicing

Faster Delivery & Faster Payments means you realize your profitability more quickly and improve your cash flow. Allow QBO to send auto-reminders after a certain passage of time and include payment options with the emailed invoice/reminder, to reduce the amount of time it takes to be paid for a completed, or progress-billed job. In addition, invoices are automatically recorded to your profit and loss statement once created, and as your bank transactions are uploaded, QBO will search for a match to assist with your bank reconciliation. Accounting made easy, with increased accuracy, while you get paid more efficiently. Put down the manual invoice book, it is time to build an Empire with the Cloud!

Setting up your Invoices for Maximum Effect

Before diving into how easy it is to invoice through your QBO App, there are a few key steps to perform within the computer application of QuickBooks Online, which include:

  • Importing your chart of accounts into QBO (Please follow link for steps)
  • Setting up your products & services
  • Track billable expenses, if applicable to your business.
  • Add payment options

Setting up your Products and Services
The following steps will assume that your corporate chart of accounts has been imported, or created, and is ready to go.

To create new products or services:

Quickbooks App - A step-by-step guide - Invoicing

Track Billable Expenses

At this point, your chart of accounts has been imported, and your products and/or services have been created. If that is not the case, and you need assistance, we would be happy to help you on your way The next item to set-up is the tracking of billable expenses (if you will pass on the cost of certain expenses/labour to your customers). Please note, adding billable expenses to an invoice is currently not available within the App, but is time-saving function within QBO browser.

To track billable expenses and include on future invoices please follow these steps:

Strata-G Tax - Quickbooks App - Step by step guide - Trackable Billable Expenses


As you generate expenses in QBO (as a result of items purchased by credit card, etc.), or new bills (Supplier Invoices), you can select whether the item purchased should be billable, and whether or not a mark-up may apply. In the illustration, the expense created for a purchase of lumber can be booked in QBO, while selecting as a billable expense, applying a mark-up of 20% and indicating which customer should be billed. Below, we will discuss how to invoice a billable amount in QBO browser. However, with relative ease, you now have a mechanism for allocating expenses for a click-of-a-button addition to customer invoices, increasing your revenue, improving accuracy, and efficiently completing your accounting (with separate mark-up account for easy tracking).

Quickbooks App - A step-by-step guide - Expense created for a purchase

Add Credit Card Payment Options to Invoices

You can add credit card payment options in QuickBooks browser, by opening a new invoice (fastest way to do so is to click + sign, top-left, and select invoice). By doing so, a secure email will be sent to your customer with a Pay Now button, which allows the customer to immediately pay their invoice online with their credit card, earning desirable reward points. In addition, QuickBooks will notify you when invoice is sent, and when it is paid by credit card, with the deposit appearing in QuickBooks, which will then be matched to your banking upload. There is a fee that is collected for QuickBooks to collect on your behalf, so you may want to consider building the collection cost into your pricing. To complete Payment set-up:

Quickbooks App - Step by step guide - Add credit card payment

Tax Tip: Tax Deferral Advantage

One advantage for incorporating your business is that revenue derived from your business, especially small business corporations, is taxed significantly lower than top marginal rates applicable to individuals. Creating an opportunity to plan a favourable distribution to owner-managers (to be discussed further in a future Strata-G blog). However, there is a deferral of taxability where profits can be reasonably retained within the corporation or reinvested in the business for additional active business income – versus distributing entirely to owner-manager. Also consider a dividend-salary mix, to meet personal and financial credit needs with your financial institution, and opportunities to distribute to lower taxed individuals within the rules of tax on split income.

Creating an Invoice within the App

These are the steps where you will begin to see how incredibly efficient and easy it is to produce invoices within minutes and email to your Client (Also estimates, just select estimate instead of invoice in the app). You can create an invoice with an iOS or Android mobile phone, both procedures are similar therefore the remainder of the article will focus on an iOS mobile device. For Android procedures, please follow this link. To create an invoice within QBO App:

Strata-G Tax - Quickbooks App - Step by step guide - Creating an Invoice within the App

Tax Tip: Registering for GST-HST

If you are a small business and your taxable supplies (revenue that is considered taxable: not charitable or medical as an example) do not exceed $30,000 over 4 consecutive quarters, you do not have to register for GST-HST, or collect GST-HST on your invoices. However, one advantage for voluntarily registering is to claim an input tax credit on the GST-HST you incur on your business expenses. This means that you can receive a 100% refund on most GST-HST that you pay. As a small supplier, you can choose to file GST-HST returns monthly, quarterly, or annually depending on cash-flow needs and your willingness to incur additional tax compliance. Once you register, you must charge GST-HST on your invoices from the date of registration (or up to 30 days prior). If you have significant start-up costs, or material purchases, voluntary GST-HST registration can save you and your business money. Once the $30,000 revenue/taxable supplies threshold has been reached you must register for GST-HST. Taxable Supplies include sales of products or services exported, which may not bear a tax rate, but are considered zero-rated (0%) taxable supplies.

Invoicing Billable Expenses (QBO Browser)

The final invoice topic to discuss is the addition of billable expenses to a Customer invoice. Billable expenses can include actual expenses and bills created from vendors, or time that has been tracked through QuickBooks time-tracking or an another integrated App (T-Sheets for example).

Within your QBO Browser:

Quickbooks App - A step-by-step guide - Invoicing billable expenses
Quickbooks App - A step-by-step guide - Invoicing billable expenses
Quickbooks App - A step-by-step guide - Invoicing billable expenses

Final Word

At first glance, quickly filling out a manual invoice may appear to skip a whole lot of steps written in this blog post. However, the time invested to setup just one invoice will improve the accuracy of your accounting, reduce discrepancies with customers, populate your profit & loss statement, reconcile your bank account and provide your customer with the means of paying with a reward based credit card. In addition, if you have invoicing that is repeatable, you can set recurring transaction rules to invoice the same customer on a pre-defined schedule and copy the invoice to other customers, as necessary.

  • Integrate accounting and banking
  • increase delivery speed
  • reduce potential errors
  • track progress
  • GET PAID!

Disclaimer: The information contained herein is of general nature and is not intended to address the circumstances of any particular individual or entity. This article expresses the opinion, experience, and expertise of staff at Strata-G Tax Professional Corporation (“Strata-G”) and does not reflect the opinion, nor certification of Intuit, or any of their affiliates.  

Although we endeavor to provide accurate, timely and value-add information in all we do, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. At Strata-G we would be pleased to tailor the facts presented in this document to your specific entity needs to ensure the advice received is appropriate to your particular situation

Nicholas Coburn

Nicolas Coburn, CPA, CA, has 15+ years of experience spread across Government Audit, Industry Financial & Tax Reporting, and Big 4 Canadian Accounting Firms.