Leverage the power of the QuickBooks Online Project Center

Helping clients find their “aha” moments is my favorite part of accounting, especially when it centers around helping them improve profitability and make better decisions. While there are many ways to accomplish this, project-based accounting has a special place in my heart. So when I was selected to present on QuickBooks Online’s Project Center at Intuit Connect, I said, “Sign me up!”

Here’s an overview of the key insights and strategies from my session.

Recently, QuickBooks rolled out several changes to its Project Center, enhancing the capabilities of an already powerful tool. By centralizing project management, accounting pros can deliver even more accurate and detailed insights to clients, pinpoint what’s driving or draining profitability, and manage a wide variety of projects with ease.

Project-based accounting isn’t just for construction companies any longer. While they make up a huge segment of users, there are a host of opportunities available to you and your clients who work in other niches and industries. Some use cases my team has seen and supported include:

• Event planners: Each event is a separate project.
• Large-scale water filtration system overhauls: These projects can be complex and span multiple years.
• Platform modernization or integration: Whether short or long term, these can have a lot of moving parts.

We’ve found that whether you’re managing the books for a multi-year project with burdened labor costs or managing smaller, segmented business efforts, the QuickBooks Online Project Center offers dynamic Profit and Loss (P&L) for any defined time period, helping you equip your clients to make smarter decisions and optimize for success.

What is the QuickBooks Online Project Center?

At its core, the QuickBooks Online Project Center is a centralized project management section within QuickBooks Online designed to improve your workflow and financial tracking in a single dashboard. The primary goals for the Project Center include enhanced profitability tracking, efficient management of labor and material costs, and better insights.

So what’s new? QuickBooks has introduced several features that make it even more effective, including:

• New Toggles and Custom Fields: Add greater customization when managing projects.
• Labor Tracking Options: Use toggles to decide how labor is recorded, either through Payroll or the Hourly Costs feature.
• Integration with QuickBooks Time: QuickBooks Online enhanced its project management capabilities by enabling the synchronization of classes and projects from QuickBooks Time to QuickBooks Online. This integration allows for more streamlined tracking and management of project-related time entries.

In addition, there are quite a few new advanced reporting capabilities I’ll share below.

Ready to Dive in? Here’s a quick overview of getting started with Project Center.

Start by making sure projects are “on” in QuickBooks Online.

Once turned on, projects show in the left menu bar. You can add a project in the top right of the screen.

You can also add projects from the Customer Center. What’s more, if you have been tracking projects as sub-customers, you can convert them into projects.

Here are a few tips to help you use Project Center even more efficiently, which paves the way for better tracking and reporting:

• Use the project title toggle (next to the project address) to manage details effectively. This feature was highly requested and has become a user favorite.
• Customize your projects further by adding unique fields during setup.
• Access projects easily from the Customer Center.

Tracking and estimating labor costs

Once you’ve added projects or converted sub-customers to projects, you can start tracking some labor costs. There are a few options to add costs of labor to projects.

From within the Project Center, there is a toggle to track labor directly from QuickBooks Online Payroll or to use the Hourly Costs feature. However, an Elite Payroll subscription is required for this option.

Instead, let’s focus on the Hourly Costs method.

Click the manage settings dropdown, and select “set cost rate.”

From there, add a burdened labor rate for your current employees. You need to set up employees to do labor costing, even if you are not using QuickBooks Online Payroll. Alternatively, you can also add employees from the set cost rate setting.

Pro Tip: We use an Excel sheet to add all the employee costs to get the total burdened rate to add here.

Be sure to select Hourly Costs on the project overview page.

Once you load in the employees and set the cost rate, you can add time to projects to get the cost of labor applied to the project.

Important: Mark all time as billable to ensure it appears in reports.

Understanding Project reports

There are a variety of reports available to you and your clients. Here’s a quick overview:

Project center reports in Plus and Advanced

• Project profitability
• Time costs by employee or vendor
• Unbilled time and expenses

Project reports only in Advanced

• Estimates vs Actuals (must use items for the report to work)

Advanced reports that include all projects by default

• Work in progress by project (must use items for the report to work)
• Estimates & progress invoicing summary by project
• Project profitability summary (must use items for the report to work)

 Need a visual breakdown?

QuickBooks Online Advanced version of introduces several enhanced features:

Estimate vs. Actual report: Compare estimated costs to actual expenses for better financial insights. Only available in QuickBooks Online Advanced, it uses project estimates that are also only available in Advanced.

Work-in-Progress (WIP) reporting: Track ongoing projects with improved precision. Again, this is only available in QuickBooks Online Advanced, and you must be using project estimates for this report to work.

Project Profitability summaries: Quickly assess the financial health of individual projects and pinpoint issues that affect profitability. You can also use these reports to solve for revenue recognition timing issues solving some over and under-billed situations.

Don’t miss these required settings

Update your products & services: Ensure all items are two-sided and include purchasing information.

Pro tip: I suggest using items even in Plus, in the event you want to upgrade at some point to ensure your process is properly set.

Turn on expense tracking: Adjust settings in Accounts and Settings to enable detailed tracking.

Don’t forget these best practices:

• Enter all data accurately: Use the item details grid, not category details, when recording costs.
• Mark time as billable: Ensure time entries show up in reports and project overviews.
• Use two-sided items: This ensures accurate tracking for income and expenses.
• Automate workflows: Simplify data entry by integrating automated tools where possible.

Considerations as you move to Project Accounting

Transitioning to project accounting requires some workflow adjustments, but the benefits of using the QuickBooks Online Project Center are worth it. By consolidating everything within the Project Center, you gain access to advanced insights and reports that sub-customers simply don’t offer.

Even if you’re currently using QuickBooks Online Plus, adopting best practice workflows early—such as using two-sided items—can save time and effort later, ensuring you’re ready when you need to be.

The biggest change centers around switching to two-sided items—so putting in the time now makes the switch to project accounting a smooth transition.

On a final note, don’t mark projects complete until you do a final review to account for any lingering costs or adjustments. I recommend waiting until a quarter has passed to account for any delayed costs before marking a project complete. Putting an end date in and marketing a project complete are two different things. After your project is complete, you cannot add any more costs to it. Although you can unmark them later, it’s a good idea to avoid this to minimize errors.

Better project tracking = Better advisory services for clients

As accounting pros, our clients look to us for insights to drive better financial decisions. The QuickBooks Online Project Center is a game-changer for project costing and profitability tracking. The Project Center equips you with the tools to provide those insights, offering a centralized platform to track profitability, manage costs, and uncover the factors driving project performance.