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Intuit
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Track income, costs, and profitability by project

Learn how to use projects to calculate your profits and costs by project. These "job costing" features are available in QuickBooks Online Plus and Accountant.

You can use projects to quickly calculate your project income and costs. QuickBooks separates your hourly labour from other project costs so everything is easy to understand. This gives you a clear picture of your profits from every project.

Step 1: Turn on and create projects

If you haven’t already, here’s an easy step to turn on and create a new project.

Step 2: Add project income and expenses

Now that you’ve created your first project, start adding income and expenses.

Adding transactions to projects won’t change how they’re categorised or affect your accounts. You’re simply tagging them so you can track specific project income and expenses.

  1. Open your project.
  2. Select the Add to project button to create a brand new transaction.
  3. Select Invoice, Receive PaymentExpenseQuotePurchase Order, Bill or Time.

You’ll automatically tag new items to projects when you select the Add to projects button.

The Time option lets you record a single day of work by one of your workers. If you want to add weekly timesheets, there are a few extra steps we will cover in Step 5.

Working from a quote?

Add quotes to projects before converting them to invoices for your customer.

You can also use progress invoicing to create multiple invoices from a single quote. That way, instead of asking for full payment at the beginning, you can invoice for partial payments throughout the project. This is a good option if you’re charging customers for a fixed fee.

Step 3: Add existing expenses

You can also tag expenses and timesheets (billable or nonbillable) you’ve created outside of the Projects menu.

Add existing expenses:

  1. Go to Expenses.
  2. Find and open the transaction.
  3. Select the project from the Customer/Project drop-down menu. Do this for each expense item you want to tag. This isn’t the same as the payee for the expense.
  4. Select Save and Close.

Add timesheets (billable or nonbillable):

  1. Go to Sales.
  2. Select the Type column to sort the list.
  3. Find and open the timesheet.
  4. Select the project from the Choose a customer or project ▼ drop-down menu. Do this for each employee’s time you want to tag.
  5. Select Save and Close.

Step 4: Add existing invoices

You can add any invoice to a project so long as it wasn't created from a quote and doesn't have any attached time or billable expenses. To add the invoice to a project, replace the name of the customer in the invoice with the project name.

If the invoice is paid and you add it to the project, the payment for the invoice will be disconnected. To avoid charging the customer twice, follow these steps.

  1. Go to Settings ⚙ and select Chart of Accounts.
  2. Select Account history on the account the payment was deposited.
  3. Select the payment for the invoice, then Edit.
  4. Select the invoice checkbox the payment is for, then Save and close.

Step 5: Track your hourly time costs

Tracking your project labour costs is a two-part process. First, you need to calculate the hourly cost rate for each worker. Then you’ll be able to add project timesheets using your hourly cost rates.

Important: Historic time entries created prior to entering an Hourly Time Cost will not show in the Time Cost report or Time Activities under cost in QuickBooks Online.

  1. Select the Projects menu.
  2. Select Hourly cost rate. This opens the hourly cost rate window.
  3. Select Add next to an employee's name.
  4. Select the calculator icon to pull up the hourly cost calculator.
  5. Add your worker’s hourly wage and employer taxes (per hour).
  6. You can also enter their overhead.
  7. When you’re done, select Add and then Save to add their hourly cost rate.
  8. Repeat these steps for each worker.
  9. Select Done.

Your payroll provider should have reports that will help you calculate these costs.

Add project timesheets

Now that you’ve added hourly time costs for each worker, it’s time to add their project hours. Learn the easiest way on how to add them.

You can check the Billable (/hr) box and edit the billable rate (the price you’re charging your customers) if you plan to invoice your customer for specific project hours.

If you make a timesheet billable:

  1. Select the Projects menu and open the project.
  2. Go to the Transactions tab.
  3. Find the timesheet on the list.
  4. From the Action column, select Create invoice.
  5. Complete the invoice and send it to your customer.

See your profits

You’ll see a snapshot of your income, costs, and profits in the header of every project page. In the Overview tab, you’ll see your hourly time costs separated from other project costs.

Step 6: Keep everything running smoothly

Now you know how to track project costs and profits. Here’s how to make sure what you’re seeing is always accurate:

  • Use the income and cost columns in the Overview tab as guides. Make sure the correct column total increases when you add invoices, expenses, and weekly timesheets. You can see these costs on the Time Activity tab or your Time cost by employee or supplier report.
  • The Time Activity tab breaks down your team’s work by date. It also provides the total cost of each employee and service you offer.
  • The Transaction tab lists all transactions tagged to a project. You can complete tasks directly from this screen, such as converting a quote to an invoice.
  • Review your Time cost by employee or supplier reports every month. Make sure you’ve correctly tagged all project-related work hours. If you’re missing hours or counting too many, your profit totals will be inaccurate.

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