How to set up project tracking on QuickBooks
Quick Answer
Enable project tracking in QuickBooks by turning on the Projects feature in your company settings, then create individual projects to track income, expenses, and profitability. You can categorize transactions by project and generate detailed project reports.
Prerequisites
- Active QuickBooks Online subscription
- Company admin or accountant user access
- Basic understanding of QuickBooks navigation
- Projects feature enabled in your plan
Step-by-Step Instructions
1
Enable the Projects Feature
Navigate to Settings (gear icon) in the top right corner and select Account and Settings. Click on the Advanced tab and scroll down to the Projects section. Toggle the switch next to Organize all job-related activity in one place to turn on project tracking. Click Save to confirm the changes.
The Projects feature may not be available in all QuickBooks plans - upgrade to QuickBooks Online Plus or Advanced if needed.
2
Create Your First Project
From the left navigation menu, click on Projects. Click the New project button in the top right. Enter a Project name and select the associated Customer from the dropdown menu. Add optional details like project description, start date, and end date. Click Save to create the project.
Use descriptive project names that include the customer name and project type for easier identification.
3
Set Up Project Categories
Within your project, click on Settings tab. Under Labor, add the employees or contractors who will work on this project by clicking Add people. Set their hourly rates if different from default rates. Under Other costs, you can pre-define expense categories specific to this project.
Setting up labor rates at the project level overrides your general employee rates for accurate project costing.
4
Configure Project Income Tracking
In the project settings, click on Income section. Enable Track income by service if you want to categorize different types of revenue for the project. Add service items by clicking Add services and selecting from your existing service items or creating new ones. Set project-specific pricing if needed.
5
Link Existing Transactions to Projects
To assign existing transactions, go to Expenses or Sales from the left menu. Open any transaction and look for the Customer/Project field. Select your customer and then choose the specific project from the dropdown. Click Save and close to update the transaction.
You can bulk edit multiple transactions by selecting them and using the batch actions to assign to projects.
6
Create Project-Specific Invoices
Navigate to Sales > Invoices and click Create invoice. In the Customer field, select your customer and then choose the specific project. Add line items, and QuickBooks will automatically track this revenue under the project. You can also convert time entries and expenses directly into invoice line items.
Use the 'Add time/costs' feature to automatically pull tracked time and expenses into your invoice.
7
Track Time and Expenses by Project
For time tracking, go to Projects > select your project > Time tab > Add time. Fill in employee, service, hours, and rate. For expenses, create expenses normally but ensure you select the correct Customer/Project in the transaction. All project-related transactions will appear in the project dashboard.
Enable time tracking in your company settings if you plan to track billable hours by project.
8
Monitor Project Performance
Access your project dashboard by clicking Projects from the left menu and selecting your project. View the Overview tab to see profit/loss summary, total costs, and profitability percentage. Use the Transactions tab to review all income and expenses. Generate detailed reports using Reports > Business overview > Project Profitability.
Set up recurring reports to automatically email project performance summaries to stakeholders.
Common Issues & Troubleshooting
Projects feature is not visible in my QuickBooks
The Projects feature requires QuickBooks Online Plus or Advanced. Upgrade your subscription or contact your admin to enable the feature in Account and Settings > Advanced.
Cannot assign transactions to projects
Ensure the transaction has a customer assigned first, then the project dropdown will appear. If still missing, check that the customer is properly linked to the project in Projects settings.
Project profitability reports showing incorrect data
Verify all income and expenses are properly categorized to the correct project. Check that labor rates are set correctly in project settings and that all time entries include the proper service items and rates.
Time tracking entries not appearing in project
Ensure time entries have both the correct customer/project selected AND a service item assigned. Go to Time tracking and edit any entries missing these required fields.
Prices mentioned in this guide are pulled from current plan data and may change. Always verify on the official QuickBooks website before purchasing.