Do you need to monitor income and costs related to your projects? QuickBooks Online makes this easy—and calculates profitability.
QuickBooks Online can provide detailed, customizable reports showing where your money is coming from and going. These reports can help determine, for example, whether customers are paying their invoices late or whether you should continue selling a specific service or product.
Sometimes, though, you should group all the income and costs of a specific job. Its Project tools can automatically tally all that. You can determine whether your project-related income, worker costs, product and service costs, and other expenditures warrant taking on specific jobs in the future.
Suppose you’re using QuickBooks Online Plus or Advanced. In that case, you can use it to calculate your projects’ profitability by assigning them relevant time, sales, and expenses. Here’s how it works.
Getting Set Up
Before working with Projects in QuickBooks Online, you must ensure the feature is turned on. Click the gear icon at the top right and select Account and Settings. Choose Advanced in the toolbar and scroll to Projects. The button there should be green, and if it isn’t, click it, then click Save. When finished, click Done at the bottom right to return to the main screen.
Creating a Project Record
Click Projects in the toolbar to open a “homepage.” It will display a list of projects you’ve created that you can filter by Status, Customer, and Employee rate. Choose New Project in the upper right. A panel will slide from the right, where you can create a project record by choosing a Customer and entering a Project name. Optional fields, Start and End Date, Status (set to “In progress” by default), and Notes, are also present.
Click Save when you’re done. When you enter transactions, your project name will appear directly under its customer’s name.
Create a Project record before you assign transactions.
Assigning Transactions to Projects
Now that you’ve got a Project record, you can begin assigning income and costs to it. You can assign seven types of transactions to projects: Bill, Expense, Estimate, Invoice, Purchase order, Receive Payment, and Time. The form type varies depending on where you enter the project name.
When spending money on a project that you’ll eventually bill a customer for (bill, expense, purchase order), choose a Vendor at the top of the form as you record billable purchases. In the table (found below) where you enter the products and services you’re buying, select your Customer/Project in a column. Also, ensure there’s a checkmark in the Billable column.
Tip: On Bill and Expense forms, you’ll find a column in front of Customer/Project labeled as Markup %. There, you can add a percentage to your billables to charge your customers extra for your work in obtaining necessary materials.
When creating the other four types of transactions (invoices, receive payment, estimate, and time), your project will be listed under the Customer name at the top.
Warning: When assigning project transactions, select the actual project name, not just the Customer name.
The Project “Homepage”
Once you’ve created a project, you can access its corresponding “homepage” by clicking it in the list on your main Projects page. It’s there where you can monitor each project’s progress and real-time profitability.
A project “homepage” showing real-time profitability
At the top, you’ll see a line graph like the one pictured above, showing your current Income vs. Cost. And you’ll see a number indicating your profit margin. Some links take you to reports for overdue and open invoices (not shown here).
A button at the top right opens links to pages to enter project-related transactions. You don’t have to access the Projects page to enter these transactions. You can join and assign them as you normally would on their pages.
Project “homepages” also contain other information. As seen from the tabs at the bottom of the sample image above, you can check the following per project:
- Overview. A summary of income, costs, and profit
- Transactions. A list showing your project transactions where you can filter them by Type and Date
- Time Activity. A list of completed billable work
- Reports. Your project’s time costs, unbilled time and expenses, and profitability
- Attachments. A space for uploading relevant documents
The how-to’s of creating Projects in QuickBooks Online are relatively easy, but the process requires precise recordkeeping. You want to ensure you’re billing your customers for everything you’ve provided and done. Also, if everything is recorded accurately, you can look at your profit margins and decide whether you need to make any pricing changes. We’re also happy to help you if you have trouble recording and analyzing project data or any questions related to QuickBooks Online.
