Welcome to the Fit Small Business QuickBooks Online training course! In this lesson, we’re going to cover how to create estimates (also known as quotes or bids) in QuickBooks Online. To follow along with me, log into your QuickBooks Online account now, or click the link below for a free 30-day trial of QuickBooks Online.
To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin!
What is an Estimate in QuickBooks Online?
An estimate, also known as a quote or a bid, is a document that provides customers with a list of the products and or services that you will provide and how much you will charge.
Below you will find a sample of a completed estimate for our fictitious company, Paul’s Plumbing.
Why Should I Create Estimates in QuickBooks Online?
You should consider creating estimates in QuickBooks because they provide the following benefits:
- Help customers decide if they want to purchase the goods or services
- It can serve as a written approval to start a job
- With the click of a button, you can easily turn the estimate into an invoice in QuickBooks Online when you are ready to bill your customer for work completed
- You can run reports in QuickBooks that will help you compare your estimates to actual income and costs after the work is completed
Estimates are not a required transaction for the sales and income process. No money changes hands when you create an estimate in QuickBooks. Estimates have no impact on your financial statements.
How Do I Create Estimates in QuickBooks Online?
Step 1 – Navigate to Create Estimates
From the Home page, below the Customers column, select Estimate as indicated below.
Step 2 – Create Estimate
The Estimate form should display on your screen. The fields that should be completed are as follows:
- Customer Name – select the customer’s name from the drop down.TIP: If you have not set up the customer info yet, you can do so by clicking on the drop down arrow, scroll up to the top of the list and select Add New. A new window will open up that will allow you to enter your customer’s information. Once you have done this, you can click save and finish your estimate.
- Customer email address – this info will automatically populate from the customer profile. If you did not enter the email address in the customer profile, then this field will be blank.TIP: You can enter the email address directly in this field and it will automatically update the customer profile.
- Billing address – this info will automatically populate from the customer profile. If you did not enter the billing address in the customer profile, then this field will be blank.TIP: You can enter the billing address directly in this field but it will not automatically update the customer profile. You will have to go back to the customer profile and enter this information for it to auto-populate going forward.
- Estimate date – this is the date you are creating the estimate. Typically QuickBooks will default to today’s date but you can change this if needed.
- Product/Service – select each product/service from the drop down list.TIP: If you have not set up the products and services info yet, you can do so by clicking on the drop down arrow, scroll up to the top of the list and select Add New. A new window will open up that will allow you to enter your product and service information. Once you have done this, you can click save and finish your estimate.
- Description – this field will auto-populate based on the product/service you selected above. However, you can customize this description by typing directly in this field.TIP: Any custom description that you enter on this estimate will not update the description for the product and service. If you want this description to auto-populate when this product or service is selected, then you need to update the products and services info.
- Qty – if applicable, enter the quantity for each product or service.
- Rate – this field will auto-populate based on the rate you set up for the product/service selected. If you did not set up a rate, then you can enter it directly on this form.TIP: Any rate that you enter on this estimate will not update the rate for the product and service. If you want this rate to auto-populate when this product or service is selected then you need to update the products and services info.
- Amount – QuickBooks will automatically multiply the quantity and the rate columns to calculate the amount.
- To delete an item, just click the trash can symbol in this column.
Right below the customer name field, is the estimate status field. This field allows you to keep track of where you are in the approval process for an estimate. There are 4 status options. Below, you will find a brief explanation of when to use each one.
- Pending status: Typically, this is the status used when you have created an estimate and sent it to your customer for approval.
- Accepted status: Once your customer has approved the estimate, it moves from pending status to accepted.
- Closed status: Once you have invoiced your customer in full then QuickBooks will mark the estimate as closed.
- Rejected status: If you send a customer an estimate and they do not approve it, this would be considered an estimate that has been rejected.
TIP: You’re probably wondering why would you keep an estimate that has been rejected by a customer. Sometimes customers change their mind and decide later on that they want to purchase the product or service. In that case, you can quickly locate the estimate, make any changes requested by the customer and change the status to accepted. This will save you time because you won’t have to create the estimate from scratch.
Step 3 – Preview Estimate
Once you have completed all of the necessary fields, you can do a print preview to see what the estimate will look like. Just click the Print or Preview button at the bottom of the screen. Below is a sample estimate for our fictitious company, Paul’s Plumbing.
Step 4 – Send Estimate to Customer From QuickBooks Online
After you are satisfied with the estimate, you can either print it out and mail it to your customer, or you can email it directly from QuickBooks.
To email the estimate directly from QuickBooks, just click on the drop down arrow to the right of the Save and close button and select Save and send.
The following should display on your screen along with a preview of the estimate.
- Email: This is the email address that is saved in the customer profile.
- Subject: This is the estimate number and your company name. You can edit this information directly on this screen.
- Body: This is the information that will appear in the body of the email that your customer receives. You can edit this information directly on this screen.
The estimate will be attached to the email as a PDF document. Once you have made your changes, select the Save to the send queue and close button as indicated below.
TIP: Be sure to check your email delivery settings before sending emails to your customers. We covered this in the how to set up sales form content lesson.
Step 5 – Copy Estimate Info to Invoice
After you have saved the estimate, you will see the Copy to invoice button at the top of the form to the left of the amount, as indicated below.
Once you are ready to invoice your customer, just click this button and it will copy all of the information on your estimate to an invoice.
That wraps up the lesson on Estimates. The next lesson in our QuickBooks Online Training Course will be How to Create & Send Invoices. In this lesson, we will walk through why it is important to invoice customers, how to invoice your customers in QuickBooks Online, and the impact invoices have on your financial statements.
To access this lesson or any of the others in the series, click here. For a free 30-day trial of QuickBooks Online, click the link below.