How to Use Xero Projects to Improve Profitability

28 August 2025

Accounting & Compliance, Cloud Accounting, Digital & Tech, Structuring a Business

Managing projects profitably can be one of the toughest challenges for small and medium-sized businesses.

Between tracking time, managing costs, and ensuring invoices go out correctly, many business owners end up buried in spreadsheets, unsure if their projects are actually making money.

This is where tools such as Xero Projects can make a real difference.

Xero’s project tracker gives you real-time insights into how your projects are performing, helping you make better decisions, improve cash flow, and ultimately increase profitability.

Track Time and Costs in Real Time

Your time is your most valuable asset.

Every hour you spend on one client is time you can’t spend elsewhere, so it’s essential that nothing slips through the cracks.

With Xero Projects, you can:

Use the start–stop timer and location-based tracking to record time on the spot.
Capture every billable hour so nothing gets missed.
Assign invoices, bills, and bank transactions directly to the right project.
Compare costs against your budget in real time to keep projects on track.

The result?

No more guesswork. You’ll know instantly whether a project is profitable.

Smarter Invoicing and Payments

Accurate invoicing is vital for both cash flow and client trust.

Xero Projects integrates seamlessly with Xero’s invoicing tools to make the process faster and more reliable:

Automatically pull tracked time and costs into invoices.
Choose between fixed-price or time-and-materials invoicing.
Send invoices for deposits, progress payments, or lump sums.
Add a ‘Pay Now’ button so clients can pay immediately.

This means fewer errors, less admin, and faster payments.

Real-Time Profitability Insights

Understanding whether your projects are profitable is key to long-term success.

Xero’s profitability dashboard gives you at-a-glance visibility over all your projects:

See a breakdown of revenue and costs for each job.
Monitor which projects are on track and which are eating into margins.
Identify the clients and types of work that deliver the best returns.

This kind of insight allows you to act quickly.

Whether that’s adjusting resources, chasing payments, or rethinking your pricing strategy.

Better Estimates and Pricing Decisions

Past projects provide valuable lessons.

With Xero Projects, you can:

Copy similar projects to create accurate new estimates.
Base pricing on real data, not guesswork or competitor rates.
Refine quotes before starting work so you know your profit margin upfront.

For service-based businesses like consultants, trades, and agencies, this means more confident pricing and fewer surprises down the line.

Why This Matters

Profitability isn’t just about getting paid — it’s about ensuring the money you earn covers the time, resources, and expenses invested.

Even if clients pay on time, poor visibility can mean working hard for little reward.

Xero Projects takes the stress out of project accounting by combining time tracking, expense management, invoicing, and reporting into one simple tool.

The result is more accurate data, better decision-making, and ultimately higher profits.

Final Thoughts

If you’re still relying on spreadsheets to track project performance, now is the time to make the switch.

Xero Projects gives you the clarity you need to:

Understand the true profitability of every job.
Invoice faster and get paid sooner.
Improve estimates for future work.
Focus on the clients and projects that add the most value.

How Friend and Grant Can Help

At Friend and Grant, we specialise in helping businesses streamline their systems so they can work smarter, not harder.

Whether you’re still juggling spreadsheets or struggling with overcomplicated software, we can help you implement Xero Projects in a way that works for your business.

Find out more about our cloud accounting services here.