How to track project profitability on FreshBooks

intermediate 8 min read Updated 2026-03-18

Quick Answer

Track project profitability in FreshBooks by setting up proper project budgets, tracking time and expenses, then using the built-in profit reports. Navigate to the Projects section and use the Profitability Report to view detailed profit margins for each project.

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Prerequisites

Active FreshBooks account
Projects created in FreshBooks
Time tracking enabled for projects
Basic understanding of project expenses and billing

Step-by-Step Instructions

Set up project budget and hourly rates

Navigate to Projects from the main dashboard. Click on your project name, then select Edit Project. Set your Project Budget and configure Hourly Rates for different team members or services. Click Save Changes to apply the budget settings.

Set realistic budgets based on historical data or detailed project estimates to ensure accurate profitability tracking.

Enable time tracking for the project

Within your project settings, ensure Time Tracking is enabled. Go to Project Settings and toggle on Track Time. Add team members who will be logging time by clicking Add Team Member and assigning their respective hourly rates.

Different team members can have different hourly rates, which helps calculate more accurate labor costs.

Log time entries and expenses

Click the Time tab in your project or use the timer widget. Log time entries with detailed descriptions using Start Timer or Add Time Entry. For expenses, navigate to Expenses and click Add Expense, then assign it to your specific project using the Project dropdown.

Use detailed descriptions for time entries to better understand which activities are most profitable.

Access the project profitability report

From the main dashboard, go to Reports in the left sidebar. Select Project Profitability from the reports list. Choose your desired date range using the Date Range filter and select specific projects using the Project filter dropdown.

Analyze profit margins and costs

Review the profitability report which shows Total Revenue, Total Costs, Profit, and Profit Margin for each project. Click on individual project names to drill down into detailed cost breakdowns including labor costs, expenses, and billable vs non-billable time.

Look for projects with consistently low profit margins to identify areas for process improvement or rate adjustments.

Set up automated profit tracking

Go to Settings > Reports and enable Automatic Report Generation. Select Project Profitability Report and set the frequency to Weekly or Monthly. Add email recipients who should receive these reports automatically.

Regular automated reports help you stay on top of project profitability without manual checking.

Create custom profitability dashboard

Return to the main dashboard and click Customize Dashboard. Add the Project Profitability widget by clicking the + button. Configure the widget to show your most important projects and key metrics like profit margin and budget utilization percentage.

Pin your most critical projects to the dashboard for quick daily monitoring of profitability trends.

Common Issues & Troubleshooting

Project profitability report shows zero profit despite logged time

Check that hourly rates are properly set for team members in Project Settings > Team Members. Verify that time entries are marked as Billable in the time tracking section.

Expenses not appearing in profitability calculations

Ensure expenses are assigned to the correct project using the Project dropdown when creating expenses. Check that expense categories are not excluded from profitability reports in Settings > Expenses.

Cannot see detailed cost breakdown for projects

Make sure you have the appropriate user permissions to view financial reports. Go to Settings > User Permissions and ensure View Reports and View Project Finances are enabled.

Profit margins seem inaccurate or inconsistent

Review your project budget settings and ensure all overhead costs are included in expense tracking. Verify that non-billable time is being tracked separately and factored into total project costs in Reports > Time Tracking.

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