How to Enter Billable Expenses in QuickBooks Online (Complete Guide)
By Md. Zakir Hossain | Last Updated: January 2025
A lot of service professionals spend time and energy passing expenses on to their customers. Maybe you're an interior designer who buys furniture for clients and marks up the cost. Maybe you're a painter who buys the paint yourself, or an IT consultant who pays for client subscriptions out of pocket. Whatever your line of work, purchasing something on a client's behalf — then billing it back later, with or without markup — is common practice. QuickBooks Online has a well-integrated system for handling this in seconds, so you never forget to bill a client for something they should be paying for.
💡 What Is a Billable Expense?
A billable expense is an expense you incur on your customer's behalf while doing work for them. QuickBooks Online lets you record and track these expenses easily, so your customer can reimburse you once they receive their invoice.
Whether you enter your expense as a Bill, Check, or Expense, you can mark it as billable. That means you'll enter the name of the customer the expense belongs to and check the billable box. If you want to mark up the cost, you can enter the applicable percentage. When you save the transaction, the expense posts as usual, and a separate non-posting transaction — the billable expense — is also recorded for later invoicing.
If you don't see the billable, customer, or markup fields on your own expense screen, you may need to activate them first, or upgrade to a higher tier of QuickBooks Online.
🛠️ Step 1 — Turn On Billable Expense Tracking
Billable expenses require QuickBooks Online Plus or a higher plan. To activate the feature:
- Click the Gear icon in the upper right corner, then select Account and Settings.
- Open the Expenses tab.
- Turn on "Track expenses and items by customer."
- Turn on "Make expenses and items billable."
- Optionally, tick "Markup with a default rate of X%" — you can leave the default at 0%.
- Click Save, then Done.
📋 Step 2 — Categorize the Expense as Billable
On the expense or bill screen, check the Billable box and select the relevant Customer. Add a markup percentage if applicable. Whatever description you type here will flow through to the client's invoice later — and you can still edit it before sending.
📧 Step 3 — Add It to the Client's Invoice
When you go to invoice a customer like Diego Rodriguez, QuickBooks will automatically remind you about any outstanding billable expenses tied to that customer. Depending on your version, this shows up as a pop-up or as a "drawer" on the right-hand side of the invoice screen — either way, QuickBooks keeps track of what's been marked billable but not yet billed out.
Just click to add the billable expense to your invoice. The description you wrote earlier will appear on the invoice. If a markup applies, it shows as a separate line item internally, but it will not appear as a separate line when the invoice is printed or sent to the client.
A bonus of using billable expenses: these amounts can post to a dedicated income account called "Billable Expense Income" on your Profit & Loss report, giving you cleaner, more informative financial reporting.
🔁 How to Set Up Recurring Expenses
If you're an IT professional — or anyone who sells the same thing at the same price to a client — there's an even faster way to handle this.
- Set up an Item or Product/Service for the expense.
- Next time you purchase the same item, just type its name and all the associated details will pre-populate automatically.
- If the purchase happens on the same day each month, save it as a Recurring (Memorized) Transaction so it posts on its own.
A memorized transaction stores everything needed — expense account, amount, description, markup percentage, transaction amount, and the client responsible for the charge — so you never have to re-enter the same information twice.
⚖️ Billable vs. Recurring Expenses — Quick Comparison
| Aspect | Billable Expense | Recurring Expense |
|---|---|---|
| Main purpose | Track and rebill a client for a cost you covered | Speed up entry of the same recurring cost |
| Plan required | QBO Plus or higher | Any QBO plan (item-based) |
| Markup | Yes, entered as a percentage | Saved within the recurring template |
| Automation | Must be manually added to an invoice | Can auto-post on a set schedule |
✅ Pro Tips and Common Mistakes
- Don't forget to check the Billable box: Check it every time you enter an expense — otherwise it never shows up on the invoice.
- Never leave the Customer field blank: Skipping this can attach the expense to the wrong client or project.
- Review your markup rate periodically: An outdated default markup can quietly erode your margins.
- Keep Billable Expense Income separate: It makes your P&L statement far easier to read and analyze.
❓ Frequently Asked Questions (FAQ)
Is Billable Expense tracking available on QuickBooks Simple Start?
No. This feature requires at least a QuickBooks Online Plus subscription.
Will my client see the markup on their invoice?
The markup amount is tracked as a separate line internally, but it does not appear as a distinct line on the invoice your client receives or prints — it's folded into the total.
Does a recurring expense automatically withdraw money from my bank?
No. It only automates the transaction entry in QuickBooks; the actual payment still follows your bank or card's own billing cycle.
Can an expense be both billable and recurring?
Yes. When you set up a recurring template, you can also save the billable checkbox and customer information as part of that template.
© ZakirZone — This article is written for educational purposes. QuickBooks is a registered trademark of Intuit Inc.
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