How to Create Projects in QuickBooks Online

You probably already know how to run a Profit & Loss report to determine whether your business is making or losing money, but what if you want to break this data down further? How can you tell whether the individual jobs/projects you do for customers, with all their related income and costs, are profitable?

This kind of insight can have an enormous impact on future business decisions about product and service pricing, worker costs, and expenses. It can even signal whether or not you should take on specific projects. If you are using QuickBooks Online Plus or Advanced, you can use the Project tools to calculate profitability. The theory is simple. You assign all relevant sales, time, and expenses to the project and QuickBooks Online will do the rest.

Getting Started

First, you will need to make sure that QuickBooks Online is ready to track projects. Click the gear icon in the upper right and select Account and Settings. Click on the Advanced tab and go down to the Projects section. If this feature is turned Off, click the pencil icon over to the right, click in the box to turn it On, and Save this option.

Create a Project

To create a project, click on Projects on the left navigation bar and then on the New Project button over to the right. This panel will slide out from the right:

Enter a Project name in that field and select a Customer from the drop-down list (or <Add New>). Notes are optional but recommended. Click Save, and your new project will appear in a list on the Projects page. QuickBooks Online stores that information along with the customer in your company file and makes it available when you create, for example, invoices, checks, expenses records, and time activities.

Linking Projects in Forms

Your project will appear in different places on different forms. On an invoice, it appears in the Customer drop-down list as a sub-item under the linked customer. You will select the project name rather than the customer to make sure the invoice was “tagged” to the project and was not just a one-off bill. If you are recording an expense, you will see a column for Customer/Project with other line items details.

There is also another way to connect transactions to their related projects. On the Projects home page, click on a project name in the list. Click the Add to project button in the upper right and select the correct transaction from the list that drops down. In some cases, like invoices, the project will already have been selected and will appear in the Customer field.

If you enter a transaction and realize later that you forgot to connect it to a project, you can correct this in most cases (like expenses and bills) by going back to the original transaction and adding (or changing) the Customer/Project name. Invoices are tricky, though, depending on their status. We would recommend you consult with us about this.

Understanding Profitability

After you have been entering project-related income and expenses for a while, you will probably be curious about whether or not you are making money – even if the project is still in progress. To do this, open the Projects home page and click on the project name. The screen that opens (like in the image above) will be devoted to that one project. You can click on tabs to see:

• An Overview that lists your income and costs, as well as your profit.
• A list of related Transactions.
• Time Activity records.
• Project Reports (Project profitability, Time cost by employee or vendor, and Unbilled time and expenses). 

We encourage you to begin using QuickBooks Online Project tools. If you are not currently on the Plus or Advanced plan and want to learn if moving to a plan that support this feature is beneficial for business, reach out to us and we can go over the pros/cons of moving to a different plan and make sure you get the best pricing.