QuickBooks Online has built-in project tracking that handles basic job costing well. Enable it under Settings, then Advanced, then turn on Projects. Once enabled, you can create a project for each job and start assigning costs to it.

Create a project for each job or contract with enough detail to identify it later. Include the customer name and job address or a project number. Keep naming consistent so you can find projects quickly when entering expenses. Once a project exists, you assign transactions to it whenever you record costs.

Categorize expenses into meaningful buckets. Labor goes to labor accounts, materials to materials, subcontractors to sub expense, equipment rental to rentals. If everything lands in generic expense accounts, your job cost reports become useless. The whole point is seeing where money went on each job so you can compare what you bid to what you actually spent.

Time tracking connects labor costs to projects. QuickBooks lets employees log hours directly to projects through the mobile app. Their time appears in job cost reports alongside materials and sub bills. If you track time in a separate system or on paper, you need a process to get that data into QuickBooks consistently or your labor costs will be incomplete.

Tag every expense to the right project when you enter it. This is where most business bookkeeping for contractors fails. Someone enters a materials bill without assigning it to a project. A month later there’s $12,000 in unassigned expenses floating in the books with no way to know which job used them. You can fix it later but only by going transaction by transaction, which rarely happens.

Pull project profitability reports regularly. In Reports, look for Project Profitability to see revenue and costs by job. You’ll see gross margin for each project and can identify which jobs made money and which lost it. Review these monthly at minimum. Weekly is better if you’re running several active jobs and need to catch problems before they compound.

The limitation of QuickBooks Online’s native job costing is depth. It handles single-level project tracking but struggles with phases, change orders, retainage, and work-in-progress calculations. If you need to track costs at the phase level or produce WIP reports for bonding, you’ll need workarounds or dedicated construction accounting software.

For contractors running a handful of jobs at a time, QuickBooks project tracking works if you’re disciplined. The software isn’t usually the problem. The consistency of entering and tagging data correctly while you’re busy in the field is what makes or breaks job costing.