How do I handle project-based billing and see profit by project?
The principle is simple: every dollar of revenue and every dollar of cost gets tagged to the project it belongs to. When you run a profitability report, you see exactly what each engagement brought in and what it cost to deliver. The difference is your real margin on that work.
In QuickBooks Online, you set up each engagement as a Project. When you send an invoice for a milestone payment, that invoice is linked to the project. When you buy materials, pay a subconsultant, or record time spent on drawings, those costs go to the same project. Nothing floats in limbo. Everything has a home.
For architects, engineers, and surveyors, labor is the biggest cost and the hardest to track accurately. You need a time tracking system that captures hours by project and by task type. This doesn’t have to be complicated. It just has to be consistent. If your team logs their hours weekly in a spreadsheet, that works. If they use a time tracking app that syncs with QBO, even better. What matters is that the hours get recorded and valued correctly so you know what you actually spent to deliver the work.
Direct costs are easier. The survey equipment rental goes to the project that needed it. The plotting costs go to the project those drawings were for. Subconsultant invoices get coded before you pay them. The discipline is coding everything at the time of the transaction, not trying to sort it out at year end.
Once the data is clean, you can run project profitability reports monthly. You’ll see which projects hit their target margin and which ones ran over. Over time, patterns emerge. Maybe residential additions always run tight while commercial site plans hold margin. Maybe one client’s projects consistently go over budget because of scope changes you don’t charge for. This is the information that helps you price better and choose projects more carefully.
Receivables need attention on long projects. A twelve-month engagement with milestone billing means invoices outstanding at any given time. Track your aging weekly. Know which invoices are current and which are past due. Following up promptly keeps cash flowing and prevents surprises when a client suddenly disputes a bill from three months ago.
If you want to go deeper, fractional CFO support adds forecasting and pricing analysis on top of clean project data. You can model what margins you need to hit, project cash flow across active engagements, and build estimates grounded in actual cost history.
The starting point is getting your bookkeeping and tax services set up to track by project from day one. If you’re running an architecture, engineering, or surveying firm and want to see which projects and clients actually make you money, reach out for a consultation about your situation.
New England's CPA-Led Bookkeeping Partner
The Next Step:
A Quick Conversation
We'll listen, ask a few questions, and show you exactly how we can help.
More Questions
1099 or W-2: how do I know if my worker is a contractor or an employee?
Two tests apply: the federal IRS test weighing control factors, and in Massachusetts, the much stricter ABC test. In Massachusetts, a worker is presumed an employee unless you can prove all three prongs of the ABC test.
Read answerWhat do you handle when you run my payroll?
Full-service payroll means we calculate pay, withhold and deposit federal and state taxes, pay your employees, file the quarterly and annual returns, and produce W-2s at year end. You approve hours and we handle everything else.
Read answerCan I pay my cleaners as 1099 contractors in Massachusetts?
In most cases, no. Massachusetts uses the ABC test for worker classification, and cleaners performing a cleaning company's core work almost always fail Prong B, which requires the work to be outside the company's usual business.
Read answerCan a property management company keep its books with you, even though it handles owner funds?
We handle the management company's own operating books, including management fee revenue, payroll, and expenses. Trust accounting for owner and tenant funds is a separate specialized service that we don't provide. If you need bookkeeping for your company's operations, we're a fit.
Read answerI am being audited. Can you represent me?
Yes. An Enrolled Agent has federal authority to represent you before the IRS during an audit. Simona can communicate with the examiner, organize your records, and argue your position on your behalf.
Read answerYou are based in Massachusetts. Can you work with my business if I am in another state?
Yes. The firm works remotely with clients across New England and nationwide, all in QuickBooks Online. Massachusetts is home base, but bookkeeping, payroll, and federal tax work travel anywhere.
Read answer