How to Create and Manage Estimates in QuickBooks Online

QuickBooks Online offers a simple way to create, manage, and convert estimates into invoices, keeping you on top of your business transactions every step of the way. Let’s explore how it works!

The Power of Estimates in Sales

When a customer reaches out for pricing on a product or service, the first step is to create an estimate. If they want any adjustments, QuickBooks Online lets you easily update the estimate, and when they’re ready to move forward, converting it to an invoice is seamless.

Here's a breakdown of how to maximize this feature.

1. Creating an Estimate

In QuickBooks Online, start by clicking New > Estimate. The estimate form is similar to an invoice form, but with one main difference: the Status field. Select Pending, Accepted, Closed, or Rejected to track the estimate’s progress.

From here:

• Choose your customer (or quickly add a new one).

• Set an expiration date if the estimate has a deadline.

• Add products or services and preview your estimate before sending.

QuickBooks Online even offers space for customer signatures, making it a complete, professional document.

2. Managing Estimate Status

It’s important to monitor where each estimate stands. In Sales > Estimates, you can view and update the status directly:

• Accepted: Confirmed for the agreed-upon terms.

• Closed or Rejected: Kept as records if the customer decides not to move forward.

For any accepted estimate, record the details of who accepted it, so you have a comprehensive record.

3. Converting an Estimate to an Invoice

Once the work is done or products are delivered, go to Sales > Estimates, locate the relevant estimate, and click Convert to Invoice. You can:

• Invoice for the total amount

• Invoice a percentage of each line

• Invoice a custom amount per line

Tip: To enable partial invoicing, go to Account and settings > Sales > Progress Invoicing.

When the invoice is created, all the details from the estimate will carry over. Review, save, and send!

4. Track Estimates with Custom Reports

Use the Estimates by Customer report to get a detailed view of all your estimates, allowing you to track the progress of each and plan upcoming sales.

Estimates and invoicing can sometimes get complicated, especially with updates and adjustments. Reach out to us for a walkthrough on QuickBooks’ estimate features or if you need support managing your client records.

Start the new year with organized estimates and see the impact on your cash flow!