In this tutorial, you will learn how to create an invoice in QuickBooks Online. QuickBooks Online invoices can be converted from estimates or made from scratch, and then emailed to customers from within QuickBooks Online.
Please enjoy this free tutorial for 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. If you don’t already subscribe to QuickBooks Online, 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. The video is from a slightly older version of QuickBooks Online. While the process of creating invoices is essentially unchanged, the layout of the screens is slightly different. The illustrated instructions are up-to-date as of the writing of the tutorial.
What Is an Invoice?
An invoice provides customers with a detailed description and cost of the products or services that you have provided. Invoices are required for sales where the customers do not pay you immediately. QuickBooks Online invoices are tracked so that you know how much each customer owes you and when payment is due. When a customer pays for a service or product immediately, they should be issued a sales receipt instead of an invoice.
Here is an example of an invoice from our fictitious company, Paul’s Plumbing:
Why Should I Create Invoices in QuickBooks?
When you create an invoice in QuickBooks, your financial statements reflect the income from the sale as well as the receivable owed to you from the customer. QuickBooks Online will track your accounts receivable and provide tools to help collect payment from your customers, including built-in payment links and automatic reminder emails.
Invoices can be generated in QuickBooks by converting existing estimates into invoices. If you did not provide the customer with an estimate, invoices can be created from scratch.
How to Convert an Estimate to an Invoice in QuickBooks Online
If you’ve already created an estimate for this job, it can easily be converted to an invoice.
1. Open the Existing Estimate
On the left menu, hover over Sales and then click Customers:
Scroll down to find the customer for which you issued an estimate and click on their name to display a list of customer activity. Then open the existing estimate by clicking on Estimate:
QuickBooks Online now opens the estimate screen that you learned about in the last tutorial, How to Create Quotes, Bids, and Estimates.
2. Convert the Estimate to an Invoice
Click on Create invoice to convert the estimate to an invoice:
Missing Create invoice button: The status of the invoice shown under the Customer field in the upper right corner must be either Pending or Accepted for the Create invoice button to be available.
You can choose to convert the entire estimate to an invoice, or just a portion of the invoice. This is useful for progress billing on larger jobs. Choose what portion of the estimate to convert to an invoice and then click the green Create invoice button:
After clicking the Create invoice button, QuickBooks Online will open the create invoice screen with all the fields populated automatically from the estimate information. You can then make any changes that you wish. For more information about the information on the create invoice screen, read the next section on creating an invoice from scratch.
How Do I Create an Invoice in QuickBooks Online?
You don’t need to create an estimate to produce an invoice. If you don’t need an estimate, create a new invoice by following these steps.
1. Navigate to Create Invoices
Click New at the top of the left menu bar and then select Invoice in the first column under Customers:
2. Enter New Invoice Information
The create invoice screen should appear for you to provide the necessary information for the invoice. This screen is very similar to the create estimate screen you learned about in the last tutorial:
The exact fields that will display for your invoice depend upon the settings you selected in How to Customize Invoices, but below are the most common fields you will have to complete:
A. Customer: Select the customer and job, if applicable, that will receive the invoice. If this is a new customer, click Add new from the customer drop-down box and provide the necessary customer information as shown in How to Set Up Customers. Once a customer is selected, the fields for email, billing and shipping addresses, terms, and location should populate automatically.
B. Invoice date: The invoice date should be the date you wish to send this invoice.
C. Service date: Enter the date you provided the service or shipped the product.
D. Product/Service: Select the product or service that you provided from your list of products and services. If this is a new Product/Service, choose Add new and provide all the necessary information as explained in the prior tutorial How to Set Up the Products and Services List. Once a product or service has been selected, the fields for description, rate, tax, and class should populate automatically.
E. Due: This field is calculated automatically when converting from an estimate or can be input when creating an invoice. It shows the portion of the total amount that is currently due for this product or service. This should be the full amount unless this is a partial invoice.
F. Quantity: Enter the quantity of each product or service sold. Once the quantity is entered, the amount will be calculated automatically as quantity times rate.
3. Print or Preview the Invoice
You can preview the invoice by clicking on Print or Preview in the bottom menu bar of the invoice screen. Print the invoice if you wish to mail the invoice or want a hard copy of the invoice for your records.
If you aren’t emailing the invoice, click the green Save and Close button in the bottom right corner of the screen.
4. Email the invoice
If you wish to email the invoice, click the drop-down box next to the green Save and close button and select Save and send:
Save and Email an Invoice in QuickBooks Online
QuickBooks will create an email automatically based on the default settings you created in How to Set Up Messages:
You can customize the default email message for this invoice if you wish. The invoice is previewed to the right of the email message and will be attached automatically. Click the green Send and close button when you are ready to send the email.
Congratulations on completing another tutorial in our QuickBooks Online Training Course. You can now create invoices from scratch or by converting accepted invoices. The next tutorial in our QuickBooks Online Training Course is How to Receive Payments.