How to use QuickBooks Online for job costing

Step-by-step

1. 1. Turn on Projects and class/location tracking

   In Settings › Account and Settings › Advanced, enable Projects and (optionally) Track classes. Projects is the QBO-native job container — use it for every active job. Classes are useful when you want a second dimension like division or entity.

2. 2. Build a job-costing chart of accounts

   Split Cost of Goods Sold into Labor, Materials, Subcontractors, Equipment, and Other Job Costs. Keep overhead out of COGS. Every job-cost transaction should land in one of these buckets so gross profit by job is meaningful.

3. 3. Set up Products & Services as cost codes

   Create two-sided items (income + expense) for each cost code — Framing, Drywall, Electrical, Permits, etc. Map each item to the right COGS and income accounts. This is what makes an Estimate vs. Actual report work in QBO.

4. 4. Create a Project for every active job

   Under Projects, add each job with the customer, start date, and value. All future bills, expenses, checks, and timesheets get tagged to that Project so QBO can roll up costs automatically.

5. 5. Code every cost to a Project and item

   On bills, expenses, and checks, use the Item details section (not just Category details) and select the Project in the Customer/Project column. Skipping the item or the project is the #1 reason job reports come out blank.

6. 6. Track labor with timesheets tied to Projects

   Turn on Time tracking, add employees and vendors as time-trackable, and enter time against the Project and service item. If you run payroll in QBO, labor cost flows straight to the job.

7. 7. Review Project reports weekly

   Use Project Profitability, Unbilled Time and Expenses, and the Estimate vs. Actual report. Review weekly — not at year-end. Catching a slipping job in week 3 is a fix; catching it in month 6 is a loss.

Frequently asked questions