You need QuickBooks Online Plus or Advanced to use the Projects feature, which is the built-in way to do job costing. If you’re on Simple Start or Essentials, you won’t see the option. Go to Settings, then Subscriptions and billing, to check your plan.

Turn on Projects by going to Settings, then Account and settings, then Advanced. Toggle on “Organize all job-related activity in one place.” Once that’s enabled, you can create a new project under the Projects tab for every job you take on. Name them clearly so anyone looking at the books can tell which job is which. Something like “Martinez Kitchen Remodel” is better than “Job 47.”

The real work is coding every transaction to the right project. When you enter a bill from your materials supplier, assign it to the project it belongs to. When a subcontractor invoices you, same thing. When you create a customer invoice, attach it to the project. If your crew tracks time in QuickBooks, those hours should be assigned to the correct project too. Every dollar in and every dollar out needs to land on the right job or your reports are useless.

Set up your categories to reflect how you actually spend money on jobs. At minimum you want to separate materials, labor, subcontractors, equipment rental, and permits. Don’t dump everything into a single “job expenses” category. The whole point of job costing is knowing where the money went so you can figure out why a job made or lost money.

Once transactions are coded, the Project Profitability report shows you revenue minus costs for each job. You can see which projects are profitable and which ones ate into your margins. QuickBooks also lets you compare estimates to actuals if you create estimates within the system, which is helpful for catching overruns before a job is finished.

The most common problem is inconsistency. You code expenses for the first two weeks of a job, then get busy and start letting things pile up uncoded. A month later you’re guessing which materials went to which project. At that point your job costing data is unreliable and you’re making decisions based on bad numbers. If you can’t stay on top of it daily, do it weekly at a minimum.

Another issue is overhead allocation. Your truck payment, insurance, and office rent don’t belong to any single job, but they still eat into your profit. QuickBooks won’t automatically allocate overhead to projects. You can either accept that project profitability reports show gross margin only, or work with your bookkeeper to build an overhead allocation method that gives you a more complete picture.

If the setup feels complicated or you’re not sure your chart of accounts is structured right for job costing, QuickBooks Online setup and training can get you started with a system that actually works for your type of business. Getting the foundation right matters because fixing a year of miscoded transactions takes far longer than setting it up correctly from the start.

For contractors and trades businesses, job costing is the difference between knowing you had a good year and knowing which jobs made it a good year. That insight changes how you bid future work, which subs you hire, and where you focus your energy. Solid bookkeeping for trades businesses depends on getting this right consistently, not just when you remember to do it.