QuickBooks Online Business Validation Error: An account you chose for a billable expense doesn't have an income account associated with it. Before you save this transaction, you need to make that association, or the income won't be reported correctly.
When you turn on the Setting for Track Expenses and items by customer and select to Make expenses and items billable in QuickBooks Online (QBO), you will have a section to choose one of two options for the Billable expense income account. You can choose to track In a single account or In multiple accounts. The error will occur if you have chosen the second option and it was not setup properly.
The second option is titled: In multiple accounts. To set it up properly, you need to edit all of your expense accounts you'll use for billable expenses. For each of them, check Use for billable expenses and assign an income account. If this step is not complete you will receive the error in question when marking an expense transaction billable.
To see and update what option you have selected, in QBO:
- Click the Gear icon and choose Company Settings.
- On the menu to the left click Expenses.
- Click in the Bills and expenses section.
- View your selection under Track billable expenses and items as income and make any necessary changes.
If continuing with option two, assign the desired billable expense account(s) to an income account to clear the error:
*Note: The following should be completed by a QBO Master Administrator only. Other users in the company file will not see Step 3.
- Click the Gear icon and choose Chart of Accounts.
- Click once to highlight the desired expense account and click Edit.
- On the Account screen, click on Use for billable expenses and select the desired Income Account from the drop down menu.
- Click on Save.