and now we will learn how to build clients for expenses that they cause us to have first you
have to pay the expense yourself the way you would write a check or enter a bill when you record your
expenses normally but when you do that you will mark the expense as billable that's different
than the way we showed it in the previous videos if you mark it as billable you can
then put it later on an invoice when you bill the client now it might check the billable check mark
automatically you would have to take a look at the defaults in the Preferences window and decide
do you want the check mark for billable to come up automatically every check and every bill or do you
want to put it yourself so let's take a look from the main menu we click Edit preferences now there
are different categories of preferences but the category of preference that we need in this case
is all the way at the bottom you scroll all the way down and you click the category of time and
expense then you click the company preferences tab there's a little check mark here in this box mark
all expenses as billable if you leave it it means every time you open the write of checks window or
the enter bills window you will see the check mark is placed and it will assume you will bill
a client later if you remove this it means the check mark will not automatically be there and
you will have to place the check mark yourself I suggest you remove it because most expenses
will not be available to clients and you don't want to have to bother keeping keeping to remind
yourself that you have to remove the check mark so we click OK and we won't have to worry about
that for example let's imagine on April 1 we pay Drex repair $200 for fixing the door that bready
broke when she threw a fit in the office we will later add this expense to the very next invoice
that we sent her when we eventually build her for future legal services what will happen when
we record this check well our repair expense will go up when we pay it because it is an expense to
us at the moment we pay it because we have not yet gotten reimbursed if we have not yet gotten
reimbursed and we have not yet build it to the client it's our expense at the moment we pay
it however at the moment we put that expense on the bill to the client the repair expense will
go down our repair expense will go down and the clients balance will go up at the moment we put
it on a bill or an invoice to the client that means that they're responsible for it so we no
longer have that expense at the moment that it's put on the bill so let's take a look at how to do
this transaction well it's the same like writing any other check if you happen to have it in your
icon bar and the date was April 5th of 2017 excuse me I think it was April 1st yes April 1st of 2017
this is not a joke okay April 1 of 2017 make sure you have the right year there and you don't have
to print the check you don't have you know you can watch the supplemental videos about check
numbers of printing we're not going to deal with that but the people who we write the check to are
rex repair now I forgot to put rex repair on the list so we could add him on the fly and new vendor
click ok and capital letters type rex repair and then you'll have rex repair on your vendor list
now what expenses now did I put repair expense I didn't actually put repair expense but we can
add it now it's called adding a list item on the fly by the way anytime you're looking through a
list item a through a list and you don't see the one you're looking for you can scroll all the way
up and you can click add new and you can add a new expense or a new account right there at the moment
you record the transaction repair expense repair expense so now we have the correct vendor and the
correct expense and we have the correct money amount two hundred dollars and most importantly
most importantly in the bottom right you have to choose the correct customer notice now that we
chose a customer or job the billable box came up and also notice the check mark did not come there
automatically why is that because we change the default and the Preferences window a moment ago
however in this case we are going to build this to Betty in the future so we click the billable
box and then we're going to click the save and close button here and now when we open up the
profit and loss by client you can see for Betty we have two hundred dollars of repair X now look
what happens when we actually bill Betty the next time we sent her an invoice will be April 5th and
we're going to build her for the eight hundred dollars of legal services that we did plus the
two hundred dollars in repairs that she caused so we're going to open an invoice window just like
the way we would in a normal case and of course we have to put the date April 5th 2017 the client
is Betty don't worry about this Oh actually this that just popped up here it is the most important
pop-up it is not a false pop-up it is part of the process you have to select the outstanding
billable time or cause you see what happened was let's take a look at what happened here as soon
as we chose Betty when we open the invoice window as soon as we chose Betty QuickBooks said oh you
have billable items for Betty would you like to add one of these to the invoice and you're
supposed to click OK and when you click OK you get this window choose billable time and cost if you
had time sheets for your lawyer associates they would all be listed here and you could put them
right on the invoice of that particular client but in this case we have expenses we have one
particular expense on the list of expenses that are billable for Betty by the way attorneys are
not allowed to mark up their expenses when they build their clients you have to build the clients
for the amount that you paid if it's a billable expense and not a legal service so all you have
to do is click the check mark in the left margin of which particular expenses you're putting on the
invoice in this case there's only one so when we click OK you will now notice that this $200 is on
this invoice now on the next row you will put your normal legal services rendered and the amount of
legal services rendered in this case was 800 so in this invoice the income will go up by 800 and the
specific Spence will decrease by 200 when we click Save and close ok just click cancel for this click
Save and close click OK ok what sometimes happens is the stupid email button is clicked here and you
can't save the invoice so you remove it save it close do not apply credits we talked about that
later and now when we look we can see that repair expense for Betty is down to zero why is repair
our expense down to zero let's take a look double click well it went up when we wrote a check to 4x
repair but then our repair expense went down when we put it on an invoice the moment you put the X