How to Create Sub-Customers in QuickBooks Online (and Why You Should)
Did you know that you can track jobs, projects, and customer locations in QuickBooks Online? Yes! It’s true, and it’s as easy as creating sub-customers. A sub-customer is exactly what it sounds like: A customer that sits with a customer or one that enforces “a hierarchical relationship between customers.”
Here’s a visual of that hierarchical relationship:
More common categories of sub-customers include:
If you need more in-depth reporting and tracking on any of the categories listed, then setting up sub-customers in your QuickBooks Online file is the way to go.
I’ve been using this feature and training my clients to use it for some time now. It’s a valuable tool, especially from a reporting standpoint.
Why use Sub-Customers?
Tracking job profitability is key to understanding job costs and expectations. It’s also vital when it comes to planning future and similar projects. Reviewing job profitability reports lets us ask questions, such as:
- Was this project profitable for our company? Why or why not?
- Did we make enough revenue to cover project expenses adequately?
- Where exactly were expenses higher than they should have been?
Now, you don’t have to track projects in QuickBooks Online by creating sub-customers, but it certainly doesn’t hurt to spend a few extra minutes setting this up. If you’re looking for a more in-depth dive into project details, then consider using sub-customers.
Now that we know the who and why of sub-customers, let’s see this in action!
- Step 1. On the left-hand panel, go to Sales
- Step 2. Click on Customers
- Step 3. If your customer was entered, select that customer. If not, click Create New Customer and enter detail.
- Step 4. Again, create a new customer.
- Step 5. Mark this customer as a sub-customer.
- Step 6. Choose the parent customer. Here, I select “Bill with Parent.” This way you can create and send a statement to the parent customer that lists invoices for this sub-customer.
That’s it—You’ve just created a sub-customer!
When creating invoices or expenses, be sure to select the sub-customer to ensure that revenue and costs are correctly applied.
These are the basics to get things going, but you can take this to the next level. For example, use it with progress invoicing and budgeting. That’s the beauty of QuickBooks Online! It’s a powerhouse of accounting software with plenty of features and functionality to get businesses the vital information they need.
Are you ready to take sub-customers to the next level?
Reach out to us today, and we’ll work one-on-one with you to make that happen!