We are using the Hourly Costs in project reports however it still shows the actual Direct Labor.

Thank you for posting your concern here in the QuickBooks Community, Jayme. Let me share more information about the project report.

The project overview will display the costs and direct labor separately. These won't be combined in the profitability report. If you choose hourly rates, the costs will be displayed. If you select payroll expenses, the direct labor will show.

Moreover, let me share this article to learn more on  how to track hourly costs for your employees: Track hourly labor costs and profitability by project in QuickBooks Online.

Keep me posted if you still have questions about your project's profitability. Have a great day ahead. 

Hi Joana,

Yes they are separate but they are showing direct labor and hour cost in overview and also profitability report. We only chose hourly cost.

Thanks for getting back to us, Jayme.

We'd love to help you resolve your issue regarding your Project Profitability report in QuickBooks Online (QBO). However, we'd like to ask for screenshots of your setup so we can determine the cause of the issue and provide appropriate troubleshooting. Any additional information is greatly appreciated.

Feel free to leave a response below by clicking the Reply button. We'll get back to you promptly to continue assisting you. Take care and have a good one.

Hi,

Here's the screenshot. We chose Hourly Cost.

Here's the screenshot from the "Overview"

Thank you for sharing a screenshot, Jayme. Allow me to share information on how to correct your report.

The Hourly Cost allows you to track labor costs based on estimated hourly rates for employees. On the other hand, Direct Labor includes actual payroll expenses (wages, taxes, workers comp insurance) incurred after running payroll. 

Since your report shows both Hourly Costs and Direct Labor in your project overview, I suggest checking if you have set up the correct settings for project tracking (Hourly Costs or Direct Labor).

Here's how:

1. Navigate to the Gear icon, then select Payroll Settings.
2. Scroll down, then click the Accounting Pencil icon.
3. Click the Wages Expense Pencil icon.
4. From "Where do you track employee wages in your QuickBooks chart of accounts?", choose Each employee's wages are posted to different types of accounts (salary, contractor, and so on).
5. From there, modify the rest of the field.
6. Click Save, then Done.

Additionally, you track hourly labor costs and profitability by project in QuickBooks Online to improve productivity and increase profit margins.

Let me know if you need further assistance with your labor costs and project reporting or have any QuickBooks-related concerns. Keep safe.

Hi,

It is still showing. Is there a way we can get rid off the Direct Labor just in Project Overview?

I acknowledge and value the time and effort you've dedicated to engaging in the Community thread, Jayme.

Based on your indication that you've already completed the initial workaround of removing the Direct Labor in the Project Overview screen, I recommend contacting our Customer Support Team for additional support and guidance on the subsequent actions to take. To connect with our Customer Support Team, please follow the instructions provided below:

1. Sign in to your QuickBooks Online company.
2. Choose Help (?).
3. Select either tab to get started:
   • Assistant: Get quick, personalized answers. Select a suggested option, or type a question or topic you need help with. If you decide you need further help, you can still Talk to a human.
   • Search: Search the QuickBooks Online knowledge base directly, or select Contact Us and choose a way to connect with us:
     • Start a chat with a support expert.
     • Get a callback from the next available expert.

Please note that QBO Plus, Essentials, and Simple Start have office hours from 6 AM to 6 PM PT on weekdays and from 6 AM to 3 PM PT on Saturdays. QBO Advanced is available anytime, any day.

Additionally, you may also visit this article to get additional information on creating and managing projects in QuickBooks Online.

Anything else in mind? Please do share your thoughts on other problems you are facing with QBO, and I will be happy to help you out. Looking forward to your response. Have a great day!

Hi,

Is there a way I can submit a ticket for improvement?

We appreciate you for coming back, CJBG.

We understand how important it is for your company to not show the Direct Labor in the Project Overview since it will show a double in labor cost on the report. We see consumer feedback as an opportunity to improve the numerous features of our products. I'd recommend giving our engineers direct feedback. They may look into this suggestion and incorporate it into future updates. Here's how:

1. Go to the Gear icon on the top menu.
2. Hit Feedback.
3. Type in your recommendation in the Share your feedback field.
4. Click Next.
5. Follow the on-screen instructions to complete the process.

Once submitted, you can track your feature request through the QBO Feature Requests website. Moreover, check out this article to learn how to manage projects in QuickBooks: Track hourly labor costs and profitability by a project in QuickBooks.

In addition to this, I'm adding this article that you can also seek self-help video tutorials on our video tutorials for QBO. This link contains details on how to efficiently manage your business in the program. 

Do not hesitate to comment below if you have additional questions about project management for we are dedicated to providing you with the guidance and support you need. Take care always.