How to Track Job Costs in QuickBooks Online Like a Pro

For construction businesses, knowing the real cost of every job isn’t a luxury—it’s a necessity. If you’re still trying to track your costs using spreadsheets or outdated software, chances are your margins aren’t as tight as they could be. Enter QuickBooks Online (QBO): a powerful tool that, when set up correctly, can transform the way contractors manage job costing.

As someone with over 20 years of experience in construction business management, and the owner of JL Bookkeeping Design, I can confidently say that job costing through QBO is one of the smartest moves you can make for your bottom line.

What Is Job Costing and Why Does It Matter?

Job costing is the process of tracking all costs and revenues associated with a specific job or project. This includes:

• Labor
• Materials
• Subcontractor expenses
• Equipment rentals
• Overhead allocations

When done right, job costing gives you clear visibility into how profitable each project really is. It helps you spot budget overruns, adjust estimates, and make better decisions for future bids.

Why QuickBooks Online for Job Costing?

QuickBooks Online is cloud-based, easy to use, and integrates with industry-specific tools like Buildertrend, Knowify, and TSheets. With the Projects feature in QBO, you can:

• Assign income and expenses directly to specific jobs
• Track profitability per project in real time
• Manage labor costs through payroll integrations
• Share access with your virtual bookkeeper, project manager, or CPA

You get instant access to insights without having to be at your desk.

Step-by-Step: How to Set Up Job Costing in QBO

1. Turn on Projects

Start by enabling the Projects feature in QuickBooks Online:

• Go to Settings > Account and Settings > Advanced
• Find the “Projects” section and toggle it on

2. Create a New Project

• Go to Projects in the left-hand menu
• Click New Project
• Name the project and assign it to a customer

Each project now acts like a container for all income and expenses tied to that job.

3. Assign Transactions to the Project

When you enter bills, invoices, time, or expenses, make sure to link them to the correct project. This includes:

• Bills from suppliers
• Time entries for employees or subcontractors
• Material purchases
• Client invoices

This is where many contractors fall short—not tagging transactions means you lose all visibility into actual costs.

4. Use Classes and Locations (Optional But Powerful)

For businesses with multiple crews, divisions, or locations, QBO’s class and location tracking can add another layer of detail to your job costing.

5. Run Project Profitability Reports

Once your transactions are correctly entered, use QBO’s reporting tools:

• Project Profitability Summary
• Time Cost by Employee or Vendor
• Unbilled Time and Expenses

These reports will help you see which jobs are earning you money—and which ones are bleeding it.

Common Mistakes to Avoid

Even with the best tools, job costing can fall apart if you’re not careful. Here are the top pitfalls I see:

1. Not assigning expenses properly. If costs aren’t tagged to the right project, your data is useless.

2. Forgetting to track time accurately. Labor is often the largest job cost, and skipping time tracking means distorted margins.

3. Ignoring change orders or scope creep. Not updating budgets or project estimates as changes come in can wreck profitability.

4. Not reconciling accounts monthly. This ensures your data is accurate and ready for reporting.

Need Help? You Don’t Have to Do This Alone

Setting up job costing in QuickBooks Online takes time and a little technical know-how. That’s where I come in. At JL Bookkeeping Design, I specialize in helping construction business owners like you get your QBO set up right—and keep it running smoothly.

Whether you need a one-time setup, a CleanUp of your existing books, or ongoing monthly support, I can help you:

• Accurately track job costs
• Improve cash flow
• Make confident business decisions based on real data

Let’s Talk

If you’re ready to get serious about job costing in QuickBooks Online, let’s chat. I offer free consultations and custom solutions tailored to the construction industry.