QBO For Contractors, Pt 2: The Projects Center

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Up until recently, when asked which version of QuickBooks was right for construction, the default answer was the Desktop was the way to go. But in recent years, QuickBooksOnline has a vast array of new features that make QBO a good fit for small contractors.

In my last article, I looked at QBO’s tools for managing multi-step jobs. Today, I’ll focus on the innovative Projects Center. QuickBooks Desktop doesn’t have anything like it!

Please join me in my webinar on December 8 to see these features in action!

The Projects Center

QBO’s new Project Center and Labor Costing tools now mean that project-based businesses have powerful job costing tools, a slick new interface providing an at-a-glance dashboard overview of the financial status of any customer job, and handy one-click reports. 

If you haven’t explored these new features, now is your chance!

Projects

Gear > Account and Settings > Advanced > Projects, Time Tracking.

Use the Projects Center in QBO Plus and Advanced to create a central hub to track all the income and expenses for a job you’re doing. Formerly known as a Customer:Job, Projects bring togetherEstimates, Invoices, Payments, Billable Expenses, Labor Costs, and Job Costing into one cost center.

Hourly Cost Rate

Use this calculator in the top right of the Projects Center to include your Labor Costing in your profitability reports, even if you’re not billing for Time and Materials.

Set this up once, and it will used across all Projects.

Hourly cost rate > Add > Calculator

Enter the Employee or Subcontractor’s hourly rate. If you’re using QuickBooks Payroll, Employer taxes will autofill. Enter in Additional employer taxes, Worker’s Compensation, and Overhead expenses, calculated down to an hourly rate. Overhead can include any unbillable expenses that it takes to manage the employee, like payroll fees or bookkeeping.

Some people don’t consider taxes and associated overhead when doing job costing! This calculation provides a true cost total on your reports.

The Projects Center

Once Projects has been turned on in the Settings, you’ll see a new Projects tab in the left Navigation. Use the Projects Center as your go-to hub to track and create financial transactions.

  1. Project List. All your current projects, at a glance. From this view you can see your Customer names, invoiced Income, incurred Expenses, current Profit Margin, and hours logged.
  2. Status. Filter for Projects In Progress, Completed, or Cancelled.
  3. Customer Filter. Filter to see all Projects for one Customer.
  4. Search. If you list is long, Search for the one you want instead of scrolling around.
  5. New Project button. Start a new Project here.
  6. Grid Gear, Print. Show or hide columns. Print the data shown on screen.
  7. Hourly Cost Rate. Set your fully-burdened labor costs to be included in calculations (see above).

The Project View

Overview

Click on any of the names or numbers to drill down into a Transaction List report.

  1. Profit Margin. Your Profit Margin and Income vs. Costs graph at-a-glance.
  2. Income. All Income transactions used by Products and Services on Customer Invoices and Sales Receipts.
  3. Costs. Hourly Time Costs -- using Time Sheets and the Calculator (see above). Cost of Goods Sold -- Time and Materials costs from all COGS or Products & Services on Bills, Checks, and Expenses. Expenses -- All overhead expenses assigned to the Customer Project.
  4. Gross Profit. Hopefully it’s positive. Otherwise, talk to your Accountant!

Transactions

1. A chronological list of every transaction of any Type that has the Customer Project assigned.

This is a huge benefit, since otherwise you have to look in the Sales Center to locate income-related transactions, and Expenses Center for cost-related transactions.

2. Use the Filter to view specific transaction types.

Click on any row to open up and view or edit a transaction.

Time Activity

Analyze Labor entered using Time Cards. View by Employee or Service.

  1. View by. Change your timeframe by Week, Month, or Employee.
  2. Group by. View the labor costs by Service item, or by Employee.
  3. Time range. Click the drop-down arrow to expand the section.
  4. Drop-down arrows. Keep drilling in as deep as you’d like to go.

Project Reports

Here you have one-click access to common reports.

  1. Project profitability (without time costs). This is a Profit & Loss Report filtered by your Customer Job.
  2. Time cost by employee or vendor. View all time entries on the Project grouped by Employee or Vendor.
  3. Unbilled time and expenses. View all the outstanding time entries that were marked Billable on your expenses that have not yet been pulled onto an Invoice.

Additional Reports

Income by Customer Summary Report

This report gives you an overall profitability report on each job. 

Project Costing - P&L Report

View how much profit you made from one Project.

Go to Projects, and click on one of your jobs. Click on the Job Profitability Report.

Conclusion

The Projects Center is a welcome innovation. I encourage my contractors to use it as their central hub for project management, and I’ve found that it enhances their ease-of-use in the software.

Third party apps like Knowify or Buildertrend add additional tools, while still syncing data with QBO’s Projects.

While QuickBooks Desktop still has more features for larger contractors, the convenience of the Project Center makes QuickBooks Online a worthy contender.

Please join me on December 8 in QBO For Contractors, my free webinar sponsored by Divvy. We’ll look to see if QuickBooks Online and the Project Center is right for you!

I also have a 2.5-hour course at Royalwise.com, a deep dive into QBO’s Projects Center. Check it out by clicking here and use coupon code IA10 for 10% off.