We also use the "Expenses" tab when entering COGS that need to be billed out; QB isn't a good program for billing out COGS compared to others that I've used.  When I use the "Add Time/Costs" to enter the COGS to an invoice and select the appropriate income account to post the mark up to, it shouldn't just post the mark up to the income account and then reduce the COGS -- the entire amount being billed out should go to the income account. 

If I've been purchasing materials over many months in preparation for an upcoming project, I don't want to see a negative COGS amount when it's time to bill the job out several months after I've purchased the material -- the only work around I've found is to do a journal entry afterwards to credit the income account and debit the negative amount in the COGS account.  (It's not ideal, especially when changes have to be made to an invoice because I have to remember to do another re-class JE but until QB gets a better system, it's the only thing that works for our business).