Creating an estimate in QuickBooks Online (QBO) is an excellent way to manage transactions in a "Pending" state. An estimate in QBO functions like a non-posting transaction, meaning it does not affect your financial reports or general ledger until it is converted into an invoice or another form of financial document. This feature can effectively serve as a way to keep transactions in a pending state until you're ready to finalize them.
How to Use Estimates for Pending Transactions in QuickBooks Online:
1. Creating an Estimate:
- Navigate to the + New Button: Click the `+ New` button at the top of the dashboard.
- Select Estimate: Find and select `Estimate` under the Customers section.
- Fill Out the Estimate Details: Enter the customer's information, the date, the products/services you are estimating, and any other necessary details.
- Save the Estimate: Save your estimate by clicking `Save and close` or `Save and send` if you want to email the estimate to the customer for their review.
2. Managing Estimates:
- Estimates stay in the system as non-posting transactions until you decide to convert them into invoices. You can review and modify them as needed without affecting your accounting books.
3. Converting Estimates to Invoices:
- When you are ready to finalize the transaction, you can easily convert the estimate into an invoice.
- Open the desired estimate, and you’ll see an option to `Convert to Invoice`. Once converted, it will affect financial reports and sync with any integrated applications like Benji Pays, depending on your settings.
4. Considerations:
- Remember that estimates do not reserve inventory or impact financial reports until converted into invoices or other financial documents.
- Keep track of all outstanding estimates to ensure they are followed up on and converted or canceled as necessary.
Using estimates in QuickBooks Online to handle transactions in a pending state before they are ready to be billed is an effective way to manage your workflow, especially if you need approvals or confirmations before proceeding. This method ensures that your accounting records remain accurate and up-to-date with real transactions.
See article: Batch Sending Invoices
QuickBooks Desktop
To set an invoice to "Pending" status in QuickBooks Desktop, you can follow these steps to adjust the invoice's state, allowing you to work on it until it's ready to be finalized and sent. This feature is useful for when you're still gathering information or awaiting confirmation before sending the invoice to your customer. Here’s how you can do it:
Steps to Set an Invoice to Pending in QuickBooks Desktop:
1. Open QuickBooks Desktop
- Start QuickBooks and open your company file.
2. Create or Open an Invoice
- To create a new invoice, go to the `Customers` menu and select `Create Invoices`.
- If you want to set an existing invoice to pending, find the invoice from the `Customer Center` or use the `Find` feature under the `Edit` menu to locate the invoice.
3. Set the Invoice to Pending
- Once you have the invoice open, look for a checkbox or option labeled `Pending` or `To be printed` or similar. The exact wording can vary depending on your version of QuickBooks.
- In some versions, you may need to go to the footer of the invoice window where you might find a checkbox labeled `Pending`. Check this box to mark the invoice as pending.
4. Save Your Changes
- After marking the invoice as pending, make sure to save your changes. Click `Save & Close` or `Save & New` if you are working on multiple invoices.
5. View and Manage Pending Invoices
- To view all pending invoices later, you can create a custom filter in the `Manage Invoices` screen or use a report that filters by invoice status. Go to the `Reports` menu, select `Customers & Receivables`, and then choose `Invoices and Received Payments`. Customize this report to show only pending invoices.
6. Finalizing the Invoice
- When you are ready to finalize and send the invoice, simply reopen the invoice, uncheck the `Pending` checkbox (if applicable), and proceed with sending or printing the invoice as usual.
XERO
In Xero accounting software, you can manage the status of your invoices efficiently, although there isn’t a direct “Pending” status as you might find in some other accounting systems. However, you can use the "Draft" status to effectively serve the same purpose as "Pending." Here’s how you can mark an invoice as Draft, which is akin to marking it as pending until you're ready to finalize and send it to your client:
Steps to Mark an Invoice as Draft in Xero:
1. Log into Xero
- Open your web browser, go to the Xero login page, and sign into your account.
2. Navigate to Sales Dashboard
- Once logged in, navigate to the `Business` menu and select `Invoices` from the dropdown. This will take you to the Sales dashboard where you can manage all your invoices.
3. Create a New Invoice or Edit an Existing One
- To create a new invoice, click the `+ New` button and select `Invoice`. Fill in the details of the invoice such as the customer’s name, date, description of the items or services, quantity, price, etc.
- If you want to edit an existing invoice that hasn’t been approved or sent yet, find the invoice in the list under the ‘Draft’ or ‘Awaiting Approval’ section and click on it to open.
4. Save as Draft
- After entering or editing the invoice details, instead of clicking ‘Approve’, click the `Save` button. This will save the invoice as a draft.
- Invoices saved as drafts are not yet finalized for sending to customers and do not affect your financial reports.
5. Manage Draft Invoices
- You can view and manage all your draft invoices by filtering them on your Invoices dashboard. Simply select the ‘Draft’ filter to display all invoices that are not yet finalized.
6. Finalizing the Invoice
- When you are ready to finalize and send the invoice, open the draft invoice, make any necessary changes, and then click `Approve`. Once approved, you can then send it to your client via email directly from Xero or print it out to mail.
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