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Track Time, Tasks & Expenses With Xero Projects

By September 2022October 31st, 2022No Comments

Xero Projects is an optional paid module inside Xero that business owners can use to track time and expenses related to work, or projects. In this blog, I take a look at the main features, and I’ve also included a short video walkthrough to show you some of the things I find interesting about Projects (scroll to the end).

What is Xero Projects?

Xero calls it a “profitability tool” but it is essentially a simple project management tool that lives within Xero. I think that the fact it sits natively inside Xero is really great, as it keeps everything in one central place.

It’s inside Xero, but you may not have seen it’s there. You have to go to your main dropdown menu button in the top left corner of Xero (where your company name is) to activate it and I think lots of people have just missed that it’s there.

Xero highlights the four big features of Projects as:

  • Estimate and quote on jobs: Quickly prepare quotes based on your estimates.
  • Track time and costs: Use the app timer or location-based tracking.
  • Send customised invoices: Turn quotes into invoices for online payment.
  • View profitability: Monitor profit margins on a dashboard.

What’s good about Xero Projects?

Projects simplifies quoting for work, getting paid, and monitoring project profitability in real time. If you are managing your projects in a spreadsheet, then this is going to be a huge improvement.

Businesses that work on a project basis are too often missing one vital part of the picture, visibility over the money. It’s essential that you know which projects are profitable and which aren’t. If you are handling everything in a very manual way, you just won’t have insight into this simple but crucial piece of information.

Other things that I like about Projects are:

  • There is no limit on the number of projects you can create.
  • You can natively record time spent on a task, so you know what to bill. You can use a start/stop timer or just enter the amount of time manually – all without having to open up a third-party tool.
  • You can get reports that show chargeable and non-chargeable hours for any period. So you can see if staff have completed their time entries, how many hours they’ve worked on a project, and whether they’re meeting their chargeable hours targets (link to that blog here).
  • You can run project tracking reports in Xero for a summary of all your projects, including which jobs are profitable or over budget. Use past projects to help estimate new ones.

What’s not good about Xero Projects?

Projects is great at what it does. But if you need a full-blown collaboration and communications tool along the lines of Asana or, you will be disappointed. It’s simply not made for that kind of project management. Key features missing for larger teams include capacity planning, WIP reporting, and revenue recognition. The reviews in the Xero App Store do suggest that people find it a bit basic.

But if you think of it as Xero does, as a profitability tool, you’ll see that it does add really good value to your Xero experience. I’d say it is ideal for small teams or where a single manager uses it to keep a track of their project contributors and costs.

If more people use it, we might see some more features developed or at least a little more nuance in how it works. One thing that seems really obvious to me is that if you change the hourly rate of a staff member, Projects will go back and change that rate historically too, which makes a nonsense of past project data.

How does Xero Projects work with Xero?

Projects is native, so it’s right there when you log into your Xero account.

It works with other native functionality such as Xero Expenses. This means you can snap and submit expenses or mileage claims with the Expenses app and assign them to a project to recover the costs.

There are four kinds of invoices you can send from Xero Projects:

  • Deposit invoice – invoice the customer for a deposit on a project, which can be applied to future invoices.
  • Tasks & expenses invoice – create an itemised invoice for chargeable tasks with time entries and expenses that haven’t been invoiced yet.
  • Project amount invoice – invoice the client for a lump-sum amount based on the project estimate or custom amount.
  • Accepted quote invoice – invoice an accepted quote.
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Are there other integrations for Xero Projects?

If you use Trello to allocate tasks and manage workflows, you can log time that’s entered against tasks in Trello directly to Xero Projects. The time entry details show that it came from Trello and let you click through to the Trello card.

How much does Xero Projects cost?

Xero Projects isn’t included in your Xero plan, but is an additional subscription like Expenses. You pay per user per month, so it’s affordable and scalable.

  • $7 for 1 user per month
  • +$5 per additional active user per month

To add Projects to your plan in Xero, just click the main dropdown menu (top left) and scroll down to “Projects” in the “Do more with Xero” menu. From there, you can review the plan options and add or try it in demo mode.

See our related blog post: An Easy Way To Manage Expenses & Spending With Xero

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