Projects in QuickBooks Online: Smarter Job Costing for Contractors

Stop guessing about project profitability — track every cost in real-time

Updated September 5, 2025 — Enhanced with new features and best practices

What You'll Get From This Guide

• Why QBO's Projects feature is critical for contractors — understand the game-changing benefits
• How to track jobs without the guesswork — real-time insights into profitability
• Common mistakes to avoid in setup — prevent costly errors from day one
• Direct links to tools and resources — get started immediately

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Projects in QuickBooks Online: Built for Contractor Job Costing

Contractors can't afford to wait until the end of the month to see if a job is profitable. With Projects in QuickBooks Online, every invoice, expense, and payroll entry connects to the right job — so you know exactly where money is going while the work is still underway.

The Projects functionality isn't just another feature; it's specifically designed to solve the unique challenges construction businesses face with job costing, project management, and real-time financial visibility.

Why Projects Matter for Contractors

Accurate Job Costing

Projects in QuickBooks Online offers an integrated approach to link every cost to the right project. Whether it's materials, subcontractor services, or equipment rental, the project field ensures accurate tracking and eliminates the confusion of mixed expenses across multiple jobs.

Real-Time Labor Visibility

Labor costing accuracy is crucial in construction, often representing the largest portion of project expenses. Projects integrates seamlessly with QuickBooks Payroll and QuickBooks Time to:

• Automatically import labor expenses into the correct project
• Track employee time efficiently, especially for mobile teams
• Reflect labor costs accurately for clear profitability insights
• Eliminate manual time entry and reduce errors

Instant Profit Clarity

No more rough estimations or waiting for month-end reports. Projects provides:

• Detailed tracking of income and costs for each project in real-time
• Elimination of guesswork in profitability analysis
• Empowerment to make timely financial decisions to stay profitable
• Project-specific reports for comprehensive financial analysis

Streamlined Billing Processes

Handle progress billing and change orders efficiently without complex spreadsheets. Projects keeps all financial data organized under individual projects, promoting transparency and simplifying client communications.

How to Set Up Projects the Right Way

Projects is powerful, but only delivers results when configured properly. Here's the essential process:

1. Creating a New Project

Start by ensuring your project setup captures all necessary details:

• Log in to your QuickBooks Online account
• Navigate to the Projects section (found under Business Overview menu)
• Click "New Project" and provide essential details including project name and associated customer
• Set up budget parameters if using budget tracking features

2. Recording Costs Systematically

Once your project exists, consistency in cost recording is critical:

• Invoices: Select the appropriate project from the project field when creating invoices for project-related expenses
• Expenses: Assign all supplies, equipment rental, and other costs to the relevant project
• Time Tracking: Ensure employee hours worked on specific jobs are allocated to the correct project through QuickBooks Time integration

3. Utilizing the Project Field

The project field appears in various transaction forms (invoices, expenses, time sheets). Always select the relevant project from the dropdown menu to maintain accurate tracking and reporting capabilities.

4. Reviewing Project Performance

Regular analysis ensures ongoing profitability:

• Access detailed breakdowns of income and costs within the Projects category
• Explore project-specific reports to analyze profitability trends
• Monitor labor costs and other financial data in real-time
• Make data-driven decisions while projects are still active

Download Our Step-by-Step Setup Guide

Avoiding Common Mistakes

These setup errors can undermine your job costing accuracy:

• Forgetting to assign costs to a project → Results in incomplete reports and inaccurate profitability analysis
• Not linking Payroll/Time integration → Labor costs get left out, skewing your true project costs
• Using generic chart of accounts → Prevents detailed cost analysis and true job profitability insights
• Inconsistent project field usage → Creates gaps in tracking that compromise decision-making data

Advanced Features for Better Control

Integration with Payroll and QuickBooks Time

When you use QuickBooks Payroll and QuickBooks Time together with Projects:

• Labor costs are automatically imported into the correct project
• Employee time tracking becomes significantly more efficient for mobile teams
• Payroll processing maintains project cost allocation automatically

Fine-Tuning Your Setup

Optimize your Projects functionality with these advanced strategies:

• Customize your Chart of Accounts to align with specific project cost categories relevant to your construction specialty
• Consider using Class tracking to further segment income, expenses, and profitability by business segment or project type
• Set up recurring project templates for similar job types to streamline future project creation

The Bottom Line for Contractors

Projects in QuickBooks Online eliminates the guesswork from job costing. When configured correctly, it tracks labor, materials, and subcontractor costs in one centralized location — enabling informed decisions while jobs are still active, not weeks after completion.

The result is improved profitability, better project management, and the financial transparency needed to grow your construction business sustainably.

Schedule a Free Setup Consultation

Or call us directly at (303) 801-4772

Frequently Asked Questions

What is the Projects feature in QuickBooks Online?

Projects in QuickBooks Online is a comprehensive job costing feature that allows contractors to track all income, expenses, and time associated with specific construction jobs in one centralized location, providing real-time profitability insights and eliminating guesswork in project management.

How does Projects help with labor cost tracking?

Projects integrates seamlessly with QuickBooks Payroll and QuickBooks Time to automatically import labor costs and track employee hours worked on specific jobs. This ensures accurate labor cost allocation without manual entry, significantly reducing errors and improving efficiency for mobile teams.

Can I track materials and subcontractor costs in Projects?

Yes, you can assign all project-related expenses including materials, equipment rental, and subcontractor services to specific projects using the project field in invoices and expense entries. This comprehensive tracking ensures complete cost visibility for each job.

What reports are available for project analysis?

QuickBooks Online provides project-specific reports that show detailed breakdowns of income and costs, profitability analysis, labor cost summaries, and other financial data in real-time. These reports enable data-driven decision making while projects are still active.

Do I need QuickBooks Payroll to use Projects effectively?

While not required, integrating QuickBooks Payroll and QuickBooks Time with Projects provides automatic labor cost tracking and more efficient time management for mobile teams, significantly improving accuracy and reducing manual data entry requirements.

How do I avoid common mistakes when setting up Projects?

Common mistakes include forgetting to assign costs to projects, not linking Payroll/Time integration, and using generic chart of accounts. Ensure every transaction is properly assigned to projects, integrate payroll systems, and customize your chart of accounts for project-specific cost categories.

Can Projects handle multiple job types or construction specialties?

Yes, Projects is flexible enough to handle various construction specialties. You can customize your chart of accounts and use class tracking to segment different types of work, whether you're doing residential, commercial, or specialized construction projects.

How does Peak Advisers help with Projects setup and optimization?

Peak Advisers provides expert QuickBooks Online consultation to ensure your Projects functionality is configured correctly for your specific construction business needs. We help optimize job costing practices, integrate payroll systems, and provide ongoing support to maximize your financial visibility and project management efficiency.

Ready to Transform Your Job Costing?

Peak Advisers specializes in QuickBooks Online setup and optimization for construction businesses.

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