Job Costing in QuickBooks Online for Contractors

You finished a big landscaping job last month. The client paid, the crew got paid, and materials are accounted for. But do you actually know if you made money on it?

That is the question job costing in QuickBooks Online answers. For contractors running several jobs at once, it is the difference between a busy month and a profitable one.

Does QuickBooks Online do job costing?

Yes. QuickBooks Online does job costing through Projects. You create a project for each job, attach invoices and costs to it, and run a Project Profitability report. You do not need a separate job costing add-on for most home service work.

Projects ships with QuickBooks Online Plus and Advanced. Simple Start and Essentials do not include it. If you are on those plans and you bid work by the job, upgrade before you try to force job costing through classes or spreadsheets.

This guide is for QBO. QuickBooks Desktop has its own job costing screens, including Premier Contractor. If that is your file, the clicks below will not match. The idea is the same: income and cost on the same job, reviewed every month.

What is job costing?

Job costing tracks every dollar of income and expense on a specific job. Instead of knowing the company made $40,000 last month, you know Job A made $8,000, Job B broke even, and Job C lost $1,200.

That is what changes bids, crew mix, and which work you take next. A P&L without jobs only tells you the company-level story. Contractors live and die on the job-level story.

How to set up job costing in QuickBooks Online

Turn on Projects, then make coding to a project part of every invoice, bill, and timesheet. Here is the setup.

Step 1: Turn on Projects

Go to Settings, then Account and Settings, then the Advanced tab. Turn on Projects. A Projects item appears in the left navigation.

Step 2: Create a project for each job

Open Projects and create a new project. Name it with the customer plus the job address or a short description. Assign it to the customer. One project per job. Do not dump every lawn on Oak Street into one bucket unless it is truly one contract.

Step 3: Assign income to the project

When you create an invoice, link it to the project. Progress invoices and change orders belong on the same project too. If the money is for that job, the invoice has to say so.

Step 4: Assign expenses to the project

On a bill, expense, or check you will see Customer/Project. Pick the job. Code:

• Materials from the supply house
• Subcontractor payments
• Equipment rentals
• Permits and dump fees that belong to that job

Step 5: Track labor by project

Most contractors skip this and then wonder why the report looks too good. Labor is usually the biggest job cost. If hours are not on the project, they will not show up in job costing.

Use QBO time tracking, a timesheet, or a connected tool such as Homebase or Buildertrend. Get crew hours onto the job so you can see actual labor cost, not a guess.

How to run a job cost report in QuickBooks Online

Once projects have income and costs, open Reports and run Project Profitability. You can also open a project and read the same numbers there. You should see:

• Income: what you billed for the job
• Cost: materials, subs, labor, and other direct costs
• Profit: the difference

Sort by profit or margin. Look at job types, not just one ugly job. If HVAC changeouts are fat and service calls are thin, your price list should change. Pull this report monthly. Year-end is too late to fix a bid.

QBO will not allocate truck payments, insurance, or rent onto the job by default. Those sit in overhead. When you read the margin, leave room for that. A 22% job margin can still be a loser once overhead is in the picture.

Construction job costing in QuickBooks Online

Home service and light construction work maps cleanly onto Projects: one address, one crew, one invoice cycle. That covers most landscaping, HVAC, plumbing, electrical, and remodeling jobs we see in Austin.

What QBO does not give you is Desktop-style cost codes. There is no built-in CSI code tree. If you need labor vs materials vs equipment on a job, use Products and Services (or items) and keep those lines on the project. Classes can split a company by department. They are a weak substitute for a job.

General contractors with 40 cost codes per job, AIA billing, and committed costs often outgrow native Projects. That is when QuickBooks Online Advanced, or a construction add-on, starts to make sense. Most lawn, HVAC, and plumbing companies never need that. They need Projects turned on and coded every day.

A real example

Say you run a gutter company. Cleanings bill at $250. Full replacements bill at $2,500. The big tickets look better until you job-cost them.

Cleanings take 45 minutes, no materials, roughly a 70% margin. Replacements take a full day, materials, and a helper, closer to 28%. That is not a reason to quit replacements. It is a reason to raise the price or buy materials better.

The same pattern shows up on HVAC changeouts vs. service, or landscape installs vs. weekly mowing. The company P&L hides it. The project report does not.

Common job costing mistakes

Leaving the project field blank. If everything hits a generic Materials account with no project, the report is noise. This is a bookkeeping habit, not a software gap.

One project for the whole year. "Smith 2026" is not job costing. Split work the way you bid it.

Ignoring labor. Materials-only job cost makes every job look rich until payroll week.

Reading the report once. Set a monthly reminder. Pair it with a clean chart of accounts for contractors so income and COGS land in the right buckets before they hit a project.

Get the file set up right

Job costing only works if the QuickBooks file is clean. If QBO is a mess, start with catch-up, then turn Projects on and code forward. KWK Books sets this up for home service businesses in Austin: the accounts, the projects, and the monthly report you will actually open.

If you want us to turn this on in your file, start with a discovery call. Monthly bookkeeping is the service. Job-level numbers are the point.