Xero Projects is the part of Xero that records time, costs and income against a specific project or client engagement, so you can see whether each job made a profit instead of only seeing business-wide totals. You create a project, log time and expenses against it, invoice straight from it and check its margin in the Project Summary report.
Here's the catch. Projects is a feature inside Xero, not a separate product, so check which Xero plan carries it before you buy rather than assuming. The plan prices further down are from Xero's US page as of October 2026; readers in the UK, Australia and Canada will see local prices on their own Xero site.
What Xero Projects tracks
Xero describes Projects as a way to record time, costs and income against one job rather than lumping everything into your overall accounts. That matters if you run a service business. Your profit and loss report might look healthy while one client quietly eats your margin, and Projects is how you'd spot it.
It tracks three things for each project:
- Time, using a start-stop timer or location-based job tracking on your device.
- Costs, from bills and other spending assigned to the project, plus linked expense claims.
- Income, from the invoices you raise against the project.
Xero then works out the project's total cost and margin for you, and lets you compare costs against the budget you set.
Setting up your first project
Xero's own setup takes a few clicks. You go to Projects, click New Project, give it a name, assign it to a customer, set a due date and, if you like, add a project estimate. After that you log time, add expenses, assign staff and raise invoices. In practice the order looks like this:
- In Xero, go to Projects and click New Project.
- Name it, assign a customer, set a due date and add an estimate.
- Log time with the timer and add bills or expenses as they come in.
- Check the Project Summary report to see how the job's tracking against budget.
- Click Create Invoice from the project when it's time to bill.
Adding the estimate is optional, but I'd always do it. Without one you can't compare what the job was meant to cost with what it did cost, and that comparison is the whole point.
Logging time and costs
The timer is the simplest route for anyone billing by the hour: start it when you begin, stop it when you finish, and the time lands on the project. Location-based job tracking does the same for people working on site.
On the cost side, bills and spending can be assigned straight to a project, and expense claims can be linked to it. You don't need to re-enter anything; you tag it to the job as you record it.
Invoicing from a project
This is where Projects saves the most time. From an open project you click Create Invoice and Xero builds the bill from the time and expenses you've already captured. According to Xero, you can:
- Create fixed price or time-and-materials invoices.
- Choose how much job detail the customer sees.
- Create a quote from the project.
- Send deposit and progress-payment invoices for longer jobs.
- Add a pay now button to online invoices.
Deposit and progress invoices are the ones I'd point a small business towards. Billing part of a long job up front keeps cash coming in instead of waiting until the end.
The reports that show job profit
Xero gives you several views of how your projects are doing:
| Report or view | Where it sits | What it shows |
|---|---|---|
| Project summary | Inside each project | Key metrics such as gross profit margin and the value of time, tasks and expenses |
| Project Summary report | Projects menu, under All Projects | Revenue, costs, time tracked and profit margin for each project |
| Profitability dashboard | Across all your projects | Revenue and costs compared project by project |
| Resource management reports | Staff time views | Chargeable time |
If you only look at one, make it the Project Summary report. It puts every project's revenue, costs, time and margin side by side, which is the quickest way to see which clients are worth keeping.
Staff hours and Trello
If you've got a team, Xero shows resource allocations, time entries, hours worked and progress against billable-hours targets for each person. That helps you see who's stretched and who's got room.
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There's also a Trello link. If you manage work in Trello, time entered against Trello tasks can be logged directly in Xero projects, and the entry shows it came from Trello, so you're not keeping two timesheets.
Project tracking or job costing?
Xero draws a clear line between the two. Project tracking is the high-level view of time, costs and invoicing tied to a project. Job costing goes deeper, comparing the estimated cost of a job with its actual cost. The optional estimate you add at setup is what lets you compare the two, so don't skip it if job costing is what you're after.
Xero's US plans
These are the three plans on Xero's US page, as of October 2026:
| Plan | Xero US price a month | Examples from Xero's plan list |
|---|---|---|
| Early | $27 | Send quotes and 20 invoices, online invoice payments, bank reconciliation, basic graphs |
| Growing | $59 | Automated bill entry, performance dashboards, budgeting with smart suggestions, auto-reconcile |
| Established | $97 | 180 day cash flow forecast and more advanced analytics |
Xero's page also shows a discounted promotional price for the first 6 months on each plan, with the terms in footnotes, and a banner saying free standard ACH bill payments are now included in Xero business plans. For the full picture across countries, see this Xero pricing guide for the US, UK and Australia. Xero also says it's on average 30% cheaper than QuickBooks, a footnoted claim on its own page; this Xero vs QuickBooks comparison looks at that head to head.
My verdict
Here's my view. Xero Projects is a good fit for service businesses that bill by the job: consultants, agencies, trades and anyone who quotes, does the work and then invoices. The timer, cost tagging and one-click invoicing remove a lot of spreadsheet work, and the Project Summary report tells you which jobs make you a profit. Just confirm on Xero's site which plan includes Projects before you sign up. If you're not sure Xero is right for you at all, the Xero free trial is the easiest way to set up one real project and see.
Frequently asked questions
What is Xero Projects?
It's Xero's project tracking feature. It lets you record time, costs and income against a specific project or client engagement instead of only seeing business-wide totals.
How do I set up a project in Xero?
Go to Projects, click New Project, give it a name, assign it to a customer, set a due date and optionally add a project estimate. Then log time, add expenses, assign staff and raise invoices.
Can I track time and expenses?
Yes. You can use a start-stop timer or location-based job tracking for time, assign bills and spending to the project, and link expense claims to it.
How do I invoice from a project?
Open the project and click Create Invoice. Xero uses the time and expenses you've captured, and you can choose fixed price or time-and-materials invoices, deposits and progress payments.
Does it work with Trello?
Yes. Xero says time entered against Trello tasks can be logged directly in Xero projects, and the entry shows it came from Trello.
Is it project tracking or job costing?
Xero calls project tracking the high-level view of time, costs and invoicing, and job costing the deeper comparison of a job's estimated cost against its actual cost.
