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How to Create an Estimate & Convert it to an Invoice in QuickBooks Online?

Estimate in QuickBooks Online

An estimate in QuickBooks Online is like a price quote you give to your customers for the products or services that you offer to them. It is an educated guess of how much something will cost or how long it will take to complete the work. Estimates are used in business to provide customers with an idea of what they can expect if they decide to work with you.

Once you save an estimate in QuickBooks, you can turn it into a sales order or invoice if the customer agrees to your quote. One important thing to remember about estimates is that they don’t directly affect your income or financial statements until they’re converted into sales orders or invoices.

In a nutshell, estimates in QuickBooks Online give customers a sneak peek at what you offer and how much it’ll cost them without any commitment. In this article, we will learn how to create estimates and how to convert them into invoices in QuickBooks Online.

Also Read:- How to Create Invoices in QuickBooks Online and Desktop?

How to Create an Estimate and Convert It to an Invoice with the New Layout?

Step 1: Create an Estimate in QuickBooks Online

  1. Open QuickBooks Online.
  2. Click on + New on the left corner, then pick Estimate.
Access Estimates in QuickBooks Online
  1. Choose + Add customer and select your customer from the list. If it’s a new customer, click on +Add new, enter their details, and then, save.
  2. Click on the dropdown arrow in the Product or service box and pick the items you want to include in the estimate. If it’s something new, click on + Add new, fill in the details, and Save.
  3. If you have set a price for your item, it will show up in the Amount column. You can change the quantity or amount according to you.
  4. By default, a new estimate is marked as “Pending“. If you want to change this, click on the dropdown arrow next to Pending and choose a different status.
  5. To personalize the estimate further, go to Estimate settings on the side panel. Click on the dropdown arrow beside each section to see more options. You can decide what information appears on your estimate by switching the toggles on or off. You’ll see a preview of your changes on the form as you make them.
  6. Once you’re done, click Save.
  7. If you want to email the estimate to your customer, click on Review and send. You can edit the email message if you want, then click Send estimate.

Step 2: Update an Estimate’s Status

Once you send the estimate to your customers they have the option to either accept it, or decline it. Customers can do this directly from their email and QuickBooks update this information itself by changing the status of the estimate. 

If it’s not updating automatically you have to update the status manually. Here’s how to do it: 

  1. Go to Sales in QuickBooks Online
  2. Click on the Estimates tab.
  3. Look for the estimate you want to update.
  4. In the Action column, click the dropdown and choose Update status.
  5. Pick Accepted, Pending, or another status from the options.
  6. Click OK.

Step 3: Convert an Estimate to an Invoice

  1. Go to Sales, then click on All sales
  2. Look for the estimate you want to turn into an invoice.
  3. In the Action column, click on Create Invoice.
  4. Make any changes needed to the invoice.
  5. If you want to customize fields on the invoice, click Manage, then choose the dropdown on the section you want to customize.
  6. Turn the switches on or off to change what shows up on the invoice. You’ll see a preview as you make changes.
  7. Click Save to save the invoice.
  8. Or, click Review and send an email to your customer.

Review Open Estimates in QuickBooks Online

  1. Go to Sales in QuickBooks Online.
  2. Click on the Estimates tab.
  3. Look for your estimate and then click on it to review.
  4. You can organize how estimates are shown by clicking on the date, number, customer, total, or status column headers.

Run a Report to Get More Details

  1. Go to Reports
  2. Access the Estimates by Customer report.
  3. Choose your date range and click Run Report.
  4. This report contains the customer name, estimate number, status, and invoice number if it has been converted.

Delete an Estimate in QuickBooks Online

If you accidentally created an estimate, you can easily delete it.

  1. Access Sales in QuickBooks Online.
  2. Click on the Estimates tab.
  3. Find and click on the estimate you want to delete.
  4. Click on More Actions.
  5. Choose Delete, then click Yes to confirm.
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How to Create an Estimate and Convert It to an Invoice with the Old Layout?

Step 1: Create an Estimate in QuickBooks Online

  1. Click on + New.
  2. Click on Estimate.
  3. Pick a customer from the Customer dropdown.
  4. If work has begun, select a status from the Pending dropdown. This step is optional.
  5. Pick the Estimate date and, optionally, the Expiration date.
  6. Enter the products or services you intend to sell.
  7. Add any other necessary information.
  8. Click on Save.

Step 2: Update an Estimate’s Status

It’s important to update the estimate’s status when your customer approves or declines the work: 

  1. Go to Sales, then click on All Sales.
  2. Find the estimate you want to update.
  3. In the Action column, click the dropdown and choose Update status.
  4. Select Accepted or another status from the options.
  5. Click OK.

Step 3: Convert an Estimate to an Invoice

  1. Access Sales in QuickBooks Online, then click on All sales 
  2. Look for the estimate you want to convert.
  3. In the Action column, click on Create Invoice.
  4. If you use progress invoicing, choose how much you want to invoice:
  • If you’re invoicing for the entire estimate amount, select the Remaining total of all lines, then click Create Invoice.
  • If you’re invoicing for only part of the estimate, select the option to enter a percentage of each line or a custom amount, then click Create Invoice.
  1. Make any necessary changes to the invoice.
  2. Click Save and send, or Save and close.

Add an Estimate to an Existing Invoice

You can also add estimates to existing invoices instead of converting them directly:

  1. Click on + New.
  2. Choose Invoice.
  3. From the Customer dropdown menu, select the customer.
  4. Next, in the Add to Invoice window, click Add on each estimate you want to include.
  5. If you use progress invoicing, decide how much to invoice:
  • To invoice for the entire estimate amount, select Remaining total of all lines, then click Copy to invoice.
  • To invoice for part of the estimate, choose to enter a percentage or custom amount for each line, then click Copy to invoice.
  1. Make any necessary updates or edits to the invoice, then click Save.
If you have multiple open estimates for a customer, you can add them all together at once. However, it’s important to consider whether your customer prefers separate invoices for each estimate.

Review Open Estimates

  1. Access Sales and click on All Sales to access the page.
  2. From there, open the Filter dropdown menu.
  3. Choose Estimates from the Type dropdown list.
  4. Click Apply to confirm your selection.

Run a Report to Get More Details

  1. Access Reports.
  2. Search for and open the Estimates by Customer report.
  3. Choose your preferred date range and click on Run report.

You’ll see details such as the customer’s name, the estimated number, its status, and the associated amount.

Delete an Estimate

If you’ve accidentally created an estimate, you can easily remove it by following these steps:

  1. Access Sales and click on All Sales.
  2. Find and open the estimate you wish to delete.
  3. Click on More.
  4. Select Delete, then confirm by clicking Yes.

Also Read:- How to Send Invoices with WhatsApp in Quickbooks Online?

Conclusion 

Estimates in QuickBooks Online help businesses provide customers with quotes for products or services. By following the steps outlined, businesses can efficiently create, manage, and convert estimates, ensuring accurate record-keeping and smooth transactions. QuickBooks Online simplifies the process, making it easier for businesses to manage finances and customer relationships.

Frequently Asked Questions

Is it Possible to Create an Invoice from an Estimate?

To manually convert an estimate, transfer the project details from your estimates to an invoice template. If you’re practicing progressive billing and only invoicing for part of a project, include only the specific line items and costs you wish to bill for at the moment.

How can I Transform a Quote into an Invoice using QuickBooks Online?

1. Access the Sales section and click on All sales.
2. Locate the estimate you wish to convert.
3. In the Action column, choose Convert to invoice.
4. If necessary, make any adjustments to the invoice.
5. Finally, click Save to complete the process.

How do I Generate a Progress Invoice based on an Estimate in QuickBooks Online?

1. Go to Settings by clicking on the gear icon.
2. Select Account and Settings.
3. Choose the Sales tab.
4. In the Progress Invoicing section, click Edit.
5. Toggle on the switch for “Create multiple partial invoices from a single estimate.”
6. When prompted to update your invoice template, select Update.
7. Click Save, then Done.

How can I Generate an Invoice for 50% of an Estimate in QuickBooks Online?

To complete the remaining 50% of the initial conversion:

1. Open your QuickBooks Online (QBO) account and click on the (+) New icon, then select Invoice.
2. Choose the customer’s name from the Customer drop-down menu.
3. Locate the estimate transaction in the Add to Invoice section on the right, then click Add.
4. Enter the remaining estimate amount and click Copy to invoice.
5. Click Save to finalize.

Upon generating your report, you’ll notice that the invoice amounts are now reflected under Accounts Receivable (A/R).

How can an Estimate be Transformed into an Invoice within QuickBooks Online?

To convert an estimate to an invoice:

1. Go to the Sales section and click on All sales.
2. Find the estimate you want to convert.
3. In the Action column, select Convert to invoice.
4. Make any needed adjustments to the invoice.
5. Click Save to finish the conversion.

How can I Make an Estimate using QuickBooks Online?

To Create an Estimate:

1. Click on + New, then select Estimate.
2. Choose a customer or add a new one.
3. Add products or services.
4. Adjust quantities or amounts.
5. Customize details and status.
6. Click Save when ready.

How do I Generate an Estimate in QuickBooks Desktop?

To Create an Estimate:

1. Go to Estimates / Create Estimates.
2. Choose a customer or add a new one.
3. Fill in the date and estimate details.
4. Select the items for the estimate.
5. If needed, create a discount item:
a. Go to Item List.
b. Add a new item with type “Discount.”
c. Enter discount details and save.

About The Author

Editorial Team

Editorial Team

At QAsolved, we are a team of skilled professionals dedicated to delivering unparalleled accounting and bookkeeping services. With backgrounds in finance and technology, our collaborative efforts focus on providing practical solutions and guidance. Our services are tailored for a range of businesses, covering advisory, CFO services, bookkeeping, and financial systems consulting. QAsolved is an award-winning consulting firm and Intuit’s #1 QuickBooks Reseller Partner. We offer comprehensive QuickBooks services, including consulting, integration, migration, maintenance, data conversion, training, and support, among other services. Over the years, we have assisted over 30K customers across various industries with their Intuit products.

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