Josh LanceJosh Lance
Part 3 – Xero In On Xero: Xero Projects

Part 3 – Xero In On Xero: Xero Projects

In the last two blog posts, I touched on Xero Projects sections: Tasks and Expenses and the Time section.  The third section in projects is the Invoices section. The Invoices section shows all of the invoices raised on this project.  There are three separate ways of raising invoices on a project. The first way is to raise a deposit invoice. You would do this in instances where you are going to get paid in advance for work not yet done.  To raise a deposit invoice, click on the blue Invoice button, select deposit, and enter in the amount of the deposit. The second way to invoice is on time and materials. To do this, you will again click on the blue Invoice button and select Tasks & Expenses.  When you click on that screen, you are shown all of the chargeable tasks and expenses from this project and you can select which ones you want to invoice on.

xero projects

For any of the tasks and expenses, you can select or deselect what tasks and expenses you want to include on this invoice and when the invoice is created.  You can also choose whether to show the time on the invoice just as the task name, or you can choose Time Entries and show a detailed invoice that is broken down by the person doing the work and the task it relates to.  For this invoice, we will choose the Time Entries function. Once you are ready to create the invoice, you will click the blue Save and Open Draft Invoice button. You can then edit the invoice and approve and send the invoice from the Invoicing module in Xero. If you go back into projects into the Invoices section, you can see the invoice that was raised and the current status of the invoice.

xero projects

The third option for invoicing from projects is the Project Amount option under the blue Invoice button.  This option is great if you are charging a flat fee or value price on a project. Similar to the deposit invoice option, you enter the price you are charging for the project and create an invoice that way.

In order to understand how profitable this project was, you can run a Project Summary report that shows all of the costs that went into the project, the total amount invoiced and your gross profit from the project. For the costs, this includes all of your expenses and the assigned cost per hour for each of the staff on the project.

xero projects

Using Xero Projects allows you to manage a project from start to finish.  You can setup your project with different tasks, record your time and expenses, and manage invoicing all from the Projects module within Xero. By doing this, you can see how profitable your projects are and make adjustments for the future to be more profitable. Xero Projects provides an easy and straightforward way to manage your projects and reduce the manual entry needed to track time and invoice.

About Josh Lance

A licensed certified public accountant (IL) and Chartered Global Management Accountant, Josh is also a family man who calls Chicago home.  Before venturing on his own with a mission to help small businesses, Josh spent his early career at a top-10 national public accounting firm before working at an ultra high net worth family office.  Josh is also an adjunct professor at Northwestern University in Evanston, IL.  He enjoys making wine at home, cooking, traveling, and cheering on his favorite football and soccer teams. Josh was honored by being selected to the 2017 class of the AICPA Leadership Academy and was named as one of the 40 under 40 in 2017 by CPA Practice Advisor.