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Best procedure for quoting projects that require disbursements?


#1

I do network and wireless installations. I will sell the wireless access points and switches, but I outsource the installation of network points and the cabling.

So I use inventory on hand in purchase orders and purchase invoices for the wireless access points and switches. I use sales on inventory in sales quotes and sales invoices.

However I can select disbursements recoverable in sales quotes - so I don’t know what the procedure is to quote for something that will require disbursments expenses on my part. Also I cannot create a purchase order using disbursements expenses. I have had to create a purchase invoice. However, if the client does not accept the quote, I will then have to delete the purchase invoice. This is not a practice that I want to follow - one should not be deleting invoices.

Lubos said that disbursements works separately and I understand where he is coming from in the sense of billable time. However I need some way of giving a client quote which covers my disbursements expense and profit for a project such as paying for the outsourcing of installation of network points. I also cannot have a situation where I am deleting purchase invoices in the event that the client does not accept the quote. I have to create a purchase invoice, because purchase orders will not allow me to select disbursements.

What I have done for sales quotes for the moment is select sales as the account, so I will have to create a new sales invoice direct from the disbursements area.

What do other people to for quoting clients for work that will require disbursements?


Inventory - Landed Cost
#2

You don’t have to select any account on sales quotes or purchase orders. These documents don’t have any material impact on your financial position or performance. The only reason why there is an option to select account is to make it straightforward when you are converting to sales invoice or purchase invoice where account field is required.

I don’t think you should be using disbursements at all. You give quote to client for $2,000. You will charge them $2,000.

Disbursements are more suitable for consultants such as lawyers or accountants who can never give exact quote upfront because the cost of service is unknown. Disbursements tab will make sure that all billable expenses are billed to client during the assignment. You don’t have this problem, so don’t use Disbursements tab.


#3

Thank you for explaining this to me in terminology that I can understand. I either misunderstood what @Tut said or he is misundertanding how disbursments work. Tomorrow I will edit the quotes/purchase orders to not use disbursements and then I will remove the disbursements module as I don’t have situations where work is done without a quote being provided and accepted. Thanks for your patience. I have found the concept of disbursements to be quite confusing, but I am getting there.


#4

I will definitely plead guilty to not always explaining things as clearly as I wish I could, @dalacor. But trust me, I know how Disbursements work–so far. I’ve used them from the very beginning for billable expenses, much as @lubos mentioned. The tab isn’t complete, and I know it’s in the development plan somewhere behind further improvements to Bank Accounts.

I’m sure creative people will think of many ways to use Manager modules that were not originally envisioned. But I agree with @lubos that Disbursements are not well-suited for what you are doing. They are better used for travel and similar pass-through expenses. I apply a simple test: if the expense will go into an expense account and come right back out via an invoice to a customer, Disbursements are the thing.


#5

Don’t worry I am not blaming you. I think that you got me confused when you mentioned in one of my topics that I should use disbursements instead of inventory. Maybe it was because you misunderstood how I do sales, but for my kind of business, inventory is the correct solution because although I buy equipment to sell straight to a client (it never sits in inventory), I have to quote the client first and when they accept the quote then I buy the product and deliver it to them. As such disbursements will not work as @lubos has explained as I am quoting the client a price whereas disbursements is more for expenses that you need to bill clients for (that have not been quoted for).

Like I said disbursements is horribly confusing! Don’t worry I am not blaming anyone. I think I misunderstood what you said and you probably did not realise that goods that I buy I quote the client for first. No worries, no harm done. :smile: