This article is part of a larger series on Accounting Software.
In this tutorial, you’ll learn how to create estimates in QuickBooks Online. Estimates can be used to provide quotes and bids to customers for proposed jobs.
We hope you’ll find this free tutorial helpful for learning QuickBooks Online, our best overall pick for small business accounting software. The tutorial is designed for you to follow along in your own QuickBooks account. To those who have no QuickBooks Online subscription yet, you can choose from a 30-day free trial or 50% off for three months.
This tutorial is part of our series of Free QuickBooks Tutorials. The video below and the illustrated instructions that follow present the same information.
Step 1: Navigate to Estimate
Step 2: Enter the Required Information
The create estimate screen provides fields to be completed that will carry information to the estimate form. The exact fields provided are determined by the sales form settings you chose in How To Set Up Sales Form Content in QuickBooks Online. The animated GIF below shows the screen used for creating a sample estimate for our fictitious company, Paul’s Plumbing.
Below is a list of some of the important fields you need to complete in QuickBooks Online’s create estimate screen.
- Customer: Select the customer and job, if applicable. If this is a new customer, select Add new at the top of the customer drop-down list and set up the customer as shown in How To Set Up Customers in QuickBooks Online. When the customer is set up properly, the fields for email, billing address, and shipping should populate automatically.
- Estimate date: Enter the date you’re creating the estimate.
- Expiration date: We highly recommend including an expiration date on your estimate. An expiration date avoids problems that might arise when a customer accepts an estimate months later when the cost of materials may have changed.
- Service date: The service date is when you expect to start working on the job.
- Product/Service: Select the product or service being proposed from the drop-down box. If this is a new product or service, select Add new at the top of the drop-down list and set up the product or service as explained in How To Set Up the Products and Services List in QuickBooks Online. When the product or service is set up properly, the Description, Rate, Tax, and Class should populate automatically.
- Qty: Enter the quantity of the goods or services that you’re proposing. Once the quantity is entered, the Amount should populate automatically as quantity times rate.
Step 2.1: Set the Estimate Status
Below the customer field in the estimate input screen is the estimate status. Click on the drop-down arrow next to Pending to change the estimate status. You can choose from four statuses to help track your outstanding estimates.
- Pending: An estimate is pending after it’s sent to a potential customer until the customer accepts or rejects the estimate or the estimate expires.
- Accepted: Accepted estimates have been approved by the customer, and a signed copy of the estimate has been received.
- Closed: QuickBooks will change the status of an estimate automatically to closed when the estimate is converted to an invoice.
- Rejected: If a client informs you that they aren’t accepting your estimate, or the expiration date of the estimate expires, you should change the status of the estimate to rejected.
Take the time to set up your company:
Creating estimates is a great example of why it’s so important to complete your company setup. The majority of the estimate populates automatically if your customers and products and services are set up properly. Creating estimates will be even faster if you customize your sales form content to include only the fields you need.
Step 3: Click Save or Save and Send
Once you enter and verify all the information, click Save or Save and Send if you want to send the estimate right away. You can see what your estimate looks like by clicking on Print or Preview in the bottom menu bar of the create invoice window and then selecting Print or Preview again as shown below.
When you opt to click Save and Send, an email template form will open where you can accept the email defaults that you set up in How To Set Up Messages in QuickBooks Online, or you can type a custom message for this estimate. A copy of the estimate will be attached to the email automatically when you click the green Send and close button.
If you wish to make changes to the estimate, you may close the print preview window to return to the input screen. Below is a sample estimate that we have created for our made-up company, Paul’s Plumbing.
Why You Should Create Estimates in QuickBooks Online
While the main purpose of creating estimates or quotes in QuickBooks is to communicate your pricing to potential customers clearly, they also serve several other purposes:
- Marketing tool: Estimates provide the information potential customers need to help them decide if they want to purchase your goods or services.
- Written approval: When a customer signs an estimate, it serves as written approval of the pricing and start date for the job.
- Expedite customer billing: When estimates are done in QuickBooks Online, you can turn the estimate into an invoice with the click of a button.
- Run reports to analyze estimated vs actual costs: You can run reports in QuickBooks that will help you compare your estimates to actual income and costs after the work is completed.
Estimates aren’t a required transaction for the sales and income accounting process. No money changes hands when you create an estimate in QuickBooks, and estimates have no impact on your financial statements.
You’ve now learned how to create estimates in QuickBooks Online. You can now create estimates and mail or email them to prospective customers. The next tutorial in our QuickBooks Online Training Course is How To Create and Send Invoices in QuickBooks Online.