How to Create an Estimate in QuickBooks 2019 – Part 1

Watch this QuickBooks 2019 tutorial video, we will discuss how estimates work and begin creating. We will also explore the main tab of estimates wherein you can see the summary of current and previous transactions.

Now that you know how to set up customers and jobs over in the Customer Center let’s start talking a little bit about creating estimates so that you can start getting some work and getting it set up in QuickBooks. This is going to be module four, section two and this is part one of Estimates.

This is your Accounts Receivable section where we’re going to start and you’ll notice the first thing on the list is the estimates option. An estimate is like a quote for a job. If I wanted to have my kitchen remodeled, I’m going to ask the contractor for a quote or an estimate on how much it’s going to cost.

You’ll notice that estimates are on the same line as this option that says Purchase Orders. Both are non-posting. What that means is if I create this estimate and this customer never calls to say do the job it doesn’t affect my books in any way.

I’d have to run specific estimate reports to see what happens to be on that list. If you don’t do estimates in your job then start with Create Invoices right here once you’re ready to invoice your customer.

You may not even see Estimates on the screen here and that would be because if you told it in the Easy Step Interview when you set up the company that you don’t create estimates it wouldn’t even be here.

I’m going to click on Estimates and this is your Estimate screen right here. The first thing it asks you to do is to pick a customer and a job from the list. You can either start typing the last few characters of the person’s name or you can drop the list down like this and choose your customer and your job.

Just a little something to remember all throughout QuickBooks. Always, always, always if you’re using the job feature click on the Job and not the customer. If you don’t what will happen is you’ll run reports and it will say Other and you’ll go, “What does that mean?”

I do recognize that all of you don’t use jobs as well so if you’re not using them then it’s not an issue for you. Notice I’m clicking Tom Allen’s Kitchen Remodel and now I’ve pulled that in and if there was any summary information or any previous transactions to see they would be listed over here in this area.

If you don’t want to see this area over here just hide it with this Hide History little arrow and that way you have more room to work on your screen.

Now something else I wanted to show you that I mentioned in the last section of module three. When we were setting up customers and jobs I told you that you have the ability to set these up on the fly, and here’s what I mean by this.

Let’s say that Tom Allen has asked me to give him an estimate for a sunroom. If you notice I don’t have sunroom set up at all but I can do it right here. Now I could click Add New but here’s the quick easy way.

Choose the customer and put a colon at the end of the name. Then you’re going to type in the name of the job. And if you notice you’re going to type it exactly like you see here, customer, colon, job and that’s what I’ve done here.

When you’re finished you have to leave the field. Hit the Tab key on your keyboard and it will say Sunroom is not in the list. Would you like to set it up?

Here I get an option to do a quick add, which is what I want to do in this case, just add it to the list, or if it was a new customer all together I could just set it up and go set all that information up.

Now let me just say if it’s a new customer you can’t add both levels at the same time. You have to add the customer first and set it up, then you can go back in and add the job.

I’m going to quick add in this case and now if I look at the dropdown you can see I have Sunroom and Kitchen Remodel on the list for Tom Allen.

The next thing you’ll see on the list is the option that says Class. Remember, I told you when we were going through the preferences that you have the ability to add a field called Class to any of your forms.

This Class option would allow you to break your business down into smaller sections. So for example, if you have multiple locations this could be that location list and you could choose from the list. If you’re not using the Class feature you wouldn’t even worry about that.

This is the template that I’m currently using to create my estimate. In a later module we’re going to talk about customizing your templates or creating new ones because you may not like how this one is set up, but for now, we’re going to use the custom estimate template that you see here.

This is the date of the transaction. It’s going to pull the current date right now but you can choose any date you’d like from this list.

The next thing you’ll notice is the Estimate Number. Now just to tell you something that happens in QuickBooks. There are a lot of things that are numbered. Checks are numbered, estimates are numbered, invoices, and some other things.

They’re all going to start with number one. You probably want to change that to some other number. That way the customer doesn’t know they’re the very first customer. Whatever number you choose the next one will be numbered sequentially unless you decide to change it.

Here you’re going to see the name and address that’s prepopulated from when we set up the customer. If you decide that this happens to be the incorrect information or you’d like to change it when you’re finished with this entire estimate and you Save & Close at the bottom it’s going to ask you if you want to change it permanently in their record.

So that’s an easy way of changing that without having to go all the way back to the customer and set it up again.

Now the next thing you’re going to notice down here, you have to click your mouse to see this dropdown arrow under Item. An item might be an inventory part, it could be what we call noninventory.

There are different types of items that you can sell your customers. And we’ll be going through those when we go through the section where we talk about items. But for now, let’s go ahead and use what they have on the list.

Let’s choose Framing. You’ll notice when I choose framing it prepopulates a description in this case and a cost. You can actually type over the description and type anything you want. This will word wrap as long as you need it to as well.

I’m going to hit the Tab key and go over to the quantity and I’m going to say that we’re going to estimate ten of these for our customer. And then also the cost.

Notice he brought in $55 and that would be for one of these. If I wanted for a one time cost to put in $50 I could certainly do that and it doesn’t change it in the permanent record. It’s just on this particular estimate.

Notice it skipped over the unit of measurement. Let me just tell you what that is real quick.

A unit of measurement is when you want to sell something by the foot, by the yard, by the case you could have a dropdown prepopulated and choose it from the list. It has to be turned on and set up in the item and this obviously is not and that’s why it skipped right over it.

You’ll notice the next thing is the amount, which you can’t change. It actually calculates the cost times the quantity to give you the amount and then puts you over in the markup field. An item can be marked up a dollar amount or a percentage.

I’m going to show you one of each. In this case, I’ll say 30%. You have to put the percent sign there or it won’t know it’s a percentage. And when I tab through notice how it changed the total for me automatically.

The last column that you see which says Tax, this has to do with sales tax. Meaning is this item taxable or not. Typically service is not and a physical item is.

I’m going to go ahead and hit Tab one more time. We’re going to add one more item to this list and this time it will be a physical part. We’re going to put in a wood door and I’ll just pick exterior from the list. Let’s put two of these on this estimate. And you’ll notice this time it has a markup already.

I’m going to delete that but let me tell you why it had a markup. You’ll see when we set up our items that if we tell QuickBooks that on average we have a certain price we buy it for and on average we have a certain price we sell it for then it will calculate that markup for us. I’m just going to mark this up $1,000.

Notice when you put in dollars you don’t put the dollar sign, you don’t put the commas. And if it’s just 0.00 you don’t need to put that in either. But notice again it just calculated all the way across.

Now I can keep adding as many items as I want to this list. This is not the last line down here. This will go on pretty much forever. So if you have a lot of line items don’t worry about running out of space.

I wanted you to notice at the very bottom it has the subtotal, the total of the markup, it has any sales tax, and it has a total down here.

Let’s go ahead and see what this would look like right now if I was going to actually send this out.

We’re going to be talking in the second part of this particular section about all these options here but one of these is a Print option and you can preview this. And this is what it will look like if I preview it.

Notice it’s very plain. It does have your customer name and it does have your customer address. It says it’s an estimate. The customer does not see the item name.

So when you’re creating items you can name that anything you want. And they also don’t see the markup. But this is what it will look like currently.

I’m going to hit Close and let’s go ahead and stop the video here and go into the second part of invoicing from estimates, part two.

Cindy McGuckin

Cindy McGuckin is an IT trainer with over 20 years of experience. Cindy currently manages the IT Training Department at Trident Technical College, she's a Member of the Association of IT Professionals, Charleston, SC chapter and the Treasurer of the South Carolina Association of Continuing Higher Education.Cindy is a Microsoft Office and QuickBooks expert and her online courses have received hundreds of 5-star reviews. Her no-nonsense approach to teaching complicated topics makes her classes engaging and interesting.