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Accounting | Buyer's Guide

Best Project Accounting Software for 2023

Published June 22, 2023

Published Jun 22, 2023

Tim Yoder, Ph.D., CPA

REVIEWED BY:
Tim Yoder, Ph.D., CPA

Danielle Bauter

WRITTEN BY:
Danielle Bauter

This article is part of a larger series on Accounting Software.

Table of Contents
  1. 1 Quick Comparison
  2. 2 Zoho Books: Best Overall
  3. 3 QuickBooks Online Pro: Best for Large Network of ProAdvisors
  4. 4 FreshBooks: Best for Service-based Projects
  5. 5 Xero: Best for Unlimited Users
  6. 6 QuickBooks Desktop Premier: Best for Desktop Users
  7. 7 Sage Business Cloud: Most Affordable
  8. 8 What Is Project Accounting Software?
  9. 9 FAQs
  10. 10 Bottom Line

Effective project management and accurate financial tracking are crucial for the success of any business. The best project accounting software combines robust accounting capabilities with powerful tools to help businesses manage their projects and monitor each project’s profitability. It enables businesses to track project costs, allocate resources, create detailed budgets, generate invoices, and analyze financial data—all in one centralized platform.

We evaluated the best project accounting software to help you determine the best solution for your business:

Comparison of Project Accounting Software

Software
Pricing
Number of Users
Track Locations & Classes
Compare Estimated vs Actual Project Costs
Assign Costs to Projects
Accounts Receivable (A/R), Accounts Payable (A/P) & Banking
Mobile App
Ease of Use
Zoho Books logo.
$20 to $275 monthly
1 to 15
✓
✕
✓
Very good
Excellent
Good
QuickBooks logo that links to the QuickBooks homepage in a new tab.
$90 or $200 monthly
5 or 25
✓
✕
✓
Excellent
Good
Very Good
FreshBooks logo.
$17 to $55 monthly
1
✕
✓
✓
Good
Good
Good
Xero logo
$70 monthly
Unlimited
✓
✓
✓
Very good
Poor
Fair
QuickBooks logo that links to the QuickBooks homepage in a new tab.
$799 to $1,999 annually
1 to 5
✓
✓
✓
Excellent
Poor
Very good
Sage Business Cloud logo.
$10 or $25 monthly
1 or unlimited
✕
✕
✓
Fair
Fair
Fair

Zoho Books: Best Overall Accounting Software for Tracking Project Profitability

Zoho Books logo.
Overall Score: 4.46 / 5

Pros

  • All paid subscriptions include access to phone support and live chat
  • Robust mobile app that can perform almost any accounting task
  • Offers a free version for users with less than $50,000 in annual revenue
  • Dedicated portal for customers to view and pay invoices
  • Scalable pricing plans

Cons

  • Free and Standard plans limit the number of invoices you can send
  • Project accounting only in paid plans
  • Managing unpaid bills is unavailable in Free and Standard plans
  • Additional fee for more users
Read our Zoho Books review
Read our Zoho Books review

Pricing

Zoho Books offers a choice of five different subscription plans with project accounting functions. (There is also a free plan for users that earn less than $50,000 in annual revenue, but it doesn’t offer project accounting.) You can sign up for a 14-day free trial with any paid plan:

  • Standard: $20 per month for up to three users and 5,000 invoices
  • Professional: $50 per month for up to five users and unlimited invoices
  • Premium: $70 per month for up to 10 users and unlimited invoices
  • Elite: $150 per month for up to 10 users, unlimited invoices, and advanced inventory
  • Ultimate: $275 per month for up to 15 users, unlimited invoices, and advanced inventory

Add-ons:

  • Additional users: $3 per user, per month
  • Receipt scanning: $10 for 50 scans per month
  • Snail mail credits for sending invoices: $2 per credit

We selected Zoho Books as the overall best accounting software for tracking project profitability because tracking and managing projects are a breeze. It includes all the project accounting features that you would expect to see—including project creation, project estimations, assignment of project costs, allocation of inventory used, and project reporting. It also has a powerful mobile app that allows you to work remotely with access to all the features in its online interface.

Zoho Books received an almost-perfect score in our evaluation of its project accounting feature. The only markdown is its inability to generate a report that compares actual to estimated labor and inventory.

  • Project tracking: Zoho Books allows users to set up and track projects, making it easier to monitor project-specific income, expenses, and profitability. You can assign income and expenses to specific projects, track project-related time, and generate reports to analyze project performance.
  • Expense management: This enables you to manage project expenses efficiently. Not only can you capture and categorize project-related expenses, but you can also record vendor bills and track reimbursable expenses. This helps to allocate costs accurately and ensures that project costs are accounted for.
  • Invoicing: The platform comes with features that are beneficial for project-based businesses. You can create customized invoices, bill clients for project work, and track payments received. Zoho Books also offers the option to bill clients based on project milestones or time-based billing rates.
  • Time tracking: This allows you to monitor the time spent on project tasks. You can track billable hours, record employee timesheets, and associate time entries with specific projects. This helps in accurate project costing and invoicing based on hours worked.
  • Reporting and analysis: Zoho Books has various reporting features to generate project-specific financial reports. You can assess project profitability, analyze project expenses, and monitor overall financial performance. These insights are critical to making informed decisions and managing projects effectively.
  • Project-based businesses: Zoho Books is a great option for project-based businesses such as construction companies, architects, event management firms, and creative agencies. Its project accounting features enable accurate tracking of project-related income and expenses, time tracking, and invoicing based on project milestones or hourly rates.
  • Retail and inventory management: Zoho Books includes basic inventory management features, allowing you to track inventory levels, manage stock movements, and generate reports to monitor sales and profitability. This is especially beneficial for companies that utilize inventory as part of their projects.
  • Service-based businesses: Zoho Books is a good fit for service-based businesses, such as consultants, agencies, IT services, marketing firms, and professional service providers. It offers features like time tracking and client invoicing, allowing businesses to track time spent on projects and bill clients accordingly.
  • Businesses working remotely: The top spot in our guide to the best mobile accounting apps is Zoho Books—and for good reason. It has excellent functionality for both iOS and Android devices and even has an app integration with Apple Watch. All of the features available in the computer interface are also accessible with the mobile app, which makes it useful for businesses working remotely.

QuickBooks Online Plus: Best for Project Accounting With a Huge Support Network of ProAdvisors

QuickBooks logo
Overall Score: 4.28 / 5

Pros

  • Track income and expenses by class and location
  • Easy access to local independent QuickBooks ProAdvisors
  • Powerful inventory tracking with automatic calculation of COGS
  • Includes receipt capture to generate transactions from uploaded receipts

Cons

  • Requires at least a Plus subscription to track project profitability and inventory
  • Unable to enter bills or record time worked through the mobile app
  • Requires one subscription per organization
  • Can be expensive compared to other software
Read our QuickBooks Online review
Read our QuickBooks Online review

Pricing

QuickBooks Online is available in four subscription options—but you’ll need either Plus or Advanced to track costs by project. You can either opt for a 30-day free trial or 50% for three months.

  • Plus: $90 per month for up to five users
  • Advanced: $200 per month for up to 25 users

One of the advantages of QuickBooks Online is that it gives you access to a large support network of QuickBooks ProAdvisors. It provides a “Find-a-ProAdvisor” directory on its website, where businesses using QuickBooks Online can search for and connect with ProAdvisors who specialize in project accounting or another specific area of expertise. It also excels in project accounting, with features such as time tracking, milestone-based billing, and progress invoicing serving as useful tools. However, just like Zoho Books, it is unable to create a report that compares actual to estimated labor and inventory.

  • QuickBooks ProAdvisors: If you don’t have the time or inclination to maintain your books, you can hire an independent QuickBooks ProAdvisor who is trained and certified by QuickBooks. For more information, read our guide on how to find a QuickBooks ProAdvisor.
  • Location and class tracking: Location tracking allows you to tag transactions based on different physical or virtual locations within your business. This feature is useful if you have multiple locations or branches, operate in different regions, or want to track financial data for specific departments or divisions. Class tracking lets you tag transactions based on different classes within your business, such as projects, products, services, or any other category that you want to analyze independently.
  • Receipt scanning: You can scan receipts for operating expenses and billable expenses and attach the receipts to your expense entries for documentation purposes. With your smartphone camera, you can capture receipts and match them with expense entries easily.
  • Mileage tracking: You can use QuickBooks Online’s mileage tracking to stay on top of your mileage expenses for client billing. You can also account for non-billable mileage expenses to track your expenses and profit. The solution offers the added benefit of GPS mileage tracking to make billing even easier.
  • Mobile check deposit: This new feature allows you to deposit checks from the mobile app. Available to QuickBooks Business Checking users, when you take a photo of your check and upload it to QuickBooks, the software will generate a digital transaction automatically. Read our QuickBooks Business Checking review for more information.
  • Startups seeking a scalable solution: We selected QuickBooks Online as the overall best startup accounting software because it is fairly scalable in case your business needs advanced accounting features as it grows. It offers multiple subscription plans that cater to different business sizes and needs. As your business grows, you can easily upgrade to a higher-tier plan to accommodate additional features. You can also grant access and set permissions for multiple users, controlling what information each user can view or modify.
  • Business owners that need help to get started: QuickBooks Online offers a free meeting with a QuickBooks ProAdvisor, who will assist you with setting up your company and chart of accounts as well as answer your general bookkeeping-related questions.
  • Businesses that want one platform for all of their business management needs: QuickBooks Online integrates with WORKetc, which is a complete business management system that offers a customer relationship management (CRM) system, time tracking, project tracking, customer support, and more. It allows you to export invoices, transactions, and expenses from WORKetc directly to QuickBooks Online, then sync payments made against WORKetc invoices to QuickBooks Online.

FreshBooks: Best Accounting Software for Service-based Projects

FreshBooks logo.
Overall Score: 4.10 / 5

Pros

  • All plans include unlimited invoices
  • Can compare estimated project costs against actual costs
  • Excellent project management tool
  • Mobile app for invoicing and accounting
  • Track time and expenses and easily add to invoices

Cons

  • No expense or income tracking by class
  • Lacks inventory management
  • Charges a fee for additional users
  • Can’t track and reconcile bank accounts without a live bank connection
  • Requires pricey Premium plan subscription for more than 50 billable customers
Read our FreshBooks review
Read our FreshBooks review

Pricing

FreshBooks offers a choice of three plans ranging in price from $17 to $55 per month, plus a custom-priced plan. It currently offers a discount of 60% off the first six months for new users. All plans allow you to manage budget and billing for projects, but only the Premium and Select plans let you track project profitability:

  • Lite: $17 per month for up to five billable clients
  • Plus: $30 per month for up to 50 billable clients
  • Premium: $55 per month, unlimited billable clients
  • Select: Custom pricing for unlimited billable clients and specialized features

Add-ons:

  • Additional team members: $11 per person, per month in all plans
  • Advanced payments: $20 per month (unavailable in Lite)

We selected FreshBooks as the best accounting software for service-based projects because of its robust project management and time tracking features. It is ideal for small service-based businesses that bill clients based on the time worked by their employees, and one of its most useful features is the ability to compare estimated and actual project costs, which is impossible with software like QuickBooks Online and Zoho Books. However, it is unable to record the actual inventory used in a project.

  • Time and project tracking: FreshBooks’ time and project tracking features are excellent, with the ability to monitor billable time, communicate with team members, and compare actual vs estimated costs per project to evaluate your efficiency and in performing work.
  • Excellent customer service: Users get several customer support options, including phone and email support and self-help guides and resources. You can even call its customer support directly.
  • Customizable invoices: The platform allows you to personalize your invoices before submitting them to clients by adding such items as your logo or a personalized message.
  • Mobile app: The FreshBooks mobile app lets you create and send invoices, enter and pay bills, accept payments online, and record billable time from your mobile device.
  • Payment reminders: You won’t need to send multiple emails or spend hours trying to contact your clients about a past-due invoice—FreshBooks will automatically send them customized reminders.
  • Small service-based businesses: Because FreshBooks lacks inventory accounting features, we recommend it for small service-based businesses seeking a strong project management solution. If your team members are working on multiple projects, its time tracking tool is useful in ensuring that no billable time is missed.
  • Businesses seeking a complete but simple do-it-yourself (DIY) accounting solution: FreshBooks is not only easy to use, but it also offers a complete set of features, making it suitable for freelancers and small business owners with no accounting background.
  • Freelancers charging hourly rates: The user-friendly interface and streamlined invoicing process allow freelancers to create and send professional-looking invoices easily. Its built-in time tracking feature lets you track billable hours, which can be helpful to ensure that your customers are invoiced accurately.
  • Businesses that want to track project profitability: Unlike Zoho Books, QuickBooks Online, and Sage Business Cloud, FreshBooks lets you compare estimated project costs against actual costs, which assists with tracking project profitability.

Xero: Best Project Accounting Software for Unlimited Users

Xero logo.
Overall Score: 4.37 / 5

Pros

  • Unlimited users for all plans
  • Extensive integration choices within the Xero App Store
  • Excellent inventory accounting
  • More affordable than other comparable software, such as QuickBooks Online

Cons

  • Only one organization per subscription, with no option to add more
  • Lowest plan is limited to 20 invoices and five bills
  • No annual billing option for plans
  • Not popular in the United States
Read our Xero review
Read our Xero review

Pricing

Xero offers three pricing plans, each of which comes with unlimited users. However, only the Established plan includes project tracking. Before subscribing, you can access all of Xero’s features for free for 30 days:

  • Established: $70 per month for unlimited invoices and bills, plus multicurrency, receipt capture, and project tracking

We chose Xero as one of the best project accounting software because of its ability to accommodate unlimited users, and it earned a perfect mark in our evaluation of its project accounting function. It can help you track and pay bills, manage inventory and invoices, claim expenses, and store files. It also has a fixed asset manager—the only one of the software we evaluated that offers this feature—that keeps fixed asset records and calculates depreciation expenses automatically.

  • Fixed asset manager: If your business uses special equipment or machines for production, you will benefit from Xero’s fixed asset manager. In the fixed asset module, you can keep track of your fixed assets, calculate depreciation, and account for disposals in the future.
  • Multicurrency support: Businesses that deal with international vendors or clients will find that Xero supports multicurrency transactions. You can invoice, track expenses, and reconcile transactions in different currencies, simplifying your global financial management.
  • Mobile app: Xero’s mobile app has all the basic features found in the cloud version, such as invoicing, managing expenses, viewing reports, and bank reconciliation. There is also a contact management integration with invoicing. The app also lets you add contacts, and Xero will provide useful information about the person automatically, such as average days to pay and billing activity.
  • Integrations: With Xero’s App Marketplace, you can connect to different third-party apps, such as Fergus and Deputy for time tracking or PayPal and ChargeBee for payment processing. Also included are ecommerce platforms, CRM systems, and payroll providers. This integration capability extends Xero’s functionality and streamlines your business processes.
  • Businesses that value collaboration and integration: Xero allows for easy integration with project stakeholders, such as clients, team members, and accountants. You can grant them access to specific project-related information, enabling smooth communication and coordination. Xero also integrates with other project management tools, such as project scheduling software, CRM systems, and document management platforms.
  • Businesses with multiple users: No matter which plan you sign up for, Xero can accommodate multiple users. If you have a large accounting team or want to give access to your managers or supervisors, this is especially convenient. The monthly fee for Xero’s plan that includes project accounting is $70, which makes it an affordable option as well.
  • Businesses that need to track fixed assets: Of all the accounting software we have reviewed, Xero is the only one with a dedicated fixed asset manager. If your business uses a lot of fixed assets, such as machinery and equipment, Xero can keep records and manage depreciation. To learn more about the factors involved, check out our guide to fixed asset accounting.

QuickBooks Desktop Premier: Best Desktop Accounting Software for Tracking Project Profitability

QuickBooks Desktop logo.
Overall Score: 4.23 / 5

Pros

  • Cash Flow Hub that lets you track your cash position and track cash performance
  • Advanced inventory management
  • Extensive customization options as compared to QuickBooks Online
  • Able to compare budgeted costs to actual costs
  • Access to a large network of independent QuickBooks ProAdvisors

Cons

  • Desktop software requires installation
  • Not able to manage fixed assets
  • Limited to five users
  • Higher upfront costs
Read our QuickBooks Desktop Premier review
Read our QuickBooks Desktop Premier review

Pricing

QuickBooks Desktop Premier 2023 is offered as an annual subscription and is priced based on the number of users.

  • $799 per year for one user
  • $1,099 per year for two users
  • $1,399 per year for three users
  • $1,699 per year for four users
  • $1,999 per year for five users

If you need more than five users, you’ll need to upgrade to Enterprise. For more information about its different features, read our review of QuickBooks Enterprise.

We selected QuickBooks Desktop Premier as the best desktop accounting software for tracking project profitability because of its robust project accounting features. We gave it a perfect score in this category because of its ability to create estimates, attach items, and allocate costs and estimates to a project. It is better at project accounting than QuickBooks Online because of its ability to compare actual costs to estimates. You can also monitor the progress of the tasks involved in a project and compare your actual to planned costs and progress, so you can easily identify issues that might affect your schedule and budget.

  • Job costing: QuickBooks Desktop allows you to create jobs to track project-related income, expenses, and profitability. You can assign transactions and costs to specific jobs and generate reports to analyze job profitability.
  • Time tracking: You can track employee time, as well as your own, spent on different projects using the built-in time tracking feature, which also has a stopwatch so that you can track it in real time. This allows you to allocate labor costs accurately to each project.
  • Budgeting: You can set project budgets in QuickBooks Desktop, which helps you compare actual project expenses against the planned budget. This feature helps you monitor project costs and identify any variances.
  • Reporting: The solution has a variety of reports that can be useful for project accounting, including profit and loss (P&L) reports by job, job costing, and expenses by job. This is useful when analyzing project profitability. The QuickBooks Contractor edition of QuickBooks Desktop offers construction-specific reports, such as unpaid vendors by job and billed vs proposal by project. You can learn more about it through our review of QuickBooks Contractor.
  • Estimate and project invoicing: QuickBooks Desktop allows you to create estimates for projects and convert them into invoices. You can also use progress invoicing to bill clients for a portion of the project’s total cost based on completed milestones.
  • Owners seeking a solution for managing multiple companies: A single subscription to QuickBooks Pro lets you manage the books of an unlimited number of companies, making it our overall best multicompany accounting software.
  • Businesses that prefer desktop software: You don’t need an internet connection to use QuickBooks Desktop, which makes it ideal for business owners who may have issues with internet connectivity or speed.
  • Contractors and construction companies: QuickBooks Desktop offers job costing functionality, making it a good fit for contractors and construction companies. It allows for the tracking of income and expenses by job, plus estimate costs and generate project-specific reports. There is a special edition of Premier specifically for contractors, and you can read more about it in our review, which is linked in the previous tab.

Sage Business Cloud: Most Affordable Software With Basic Project Accounting Features

Sage Business Cloud logo.
Overall Score: 3.76 / 5

Pros

  • Easy set-up and user-friendly interface
  • Supports unlimited transactions
  • Inexpensive compared to other accounting software
  • Integrates with payment processors

Cons

  • Unable to create recurring purchase invoices
  • Doesn’t automatically calculate cost of goods sold (COGS) when inventory is sold
  • Lacks income and expense tracker by class and a client portal
  • Limited integration options
Read our Sage Business Cloud review
Read our Sage Business Cloud review

Pricing

Sage Business Cloud offers two subscription plans, which differ in price based on the number of users, access to real-time reports, and the ability to generate quotes and estimates. You can sign up for a 30-day free trial with no credit card required:

  • Sage Accounting Start: $10 per month for one user
  • Sage Accounting: $25 per month for unlimited users

We chose Sage Business Cloud as the most affordable software with basic project accounting features because of its ability to create quotes and estimates easily. You can also assign costs and inventory to projects when creating bills and invoices. However, you’re not able to assign estimates to projects, which means you can’t compare budget-to-actual results. Despite that, it is a good option for budget-minded businesses that want access to a well-rounded solution for project accounting.

  • Cost tracking by project: Sage Business Cloud allows you to assign income and expenses to specific projects or clients, and track project-related costs such as materials, labor, and other expenses.
  • Invoicing and estimates: Users can create and send project-specific invoices to clients and customize the invoices to include project details and billable items. The software also supports estimates, allowing you to create and send project estimates to clients for approval.
  • Reporting: The platform has basic reports, including income statements and balance sheets. While it may not offer extensive project reporting, you can use filters and customization options to analyze a project’s profitability.
  • Mobile app: Sage Business Cloud’s mobile app lets you send invoices, receive payments, enter bills, capture receipts, and enter bill payments, making it on par with QuickBooks Online but not as powerful as the mobile app for Zoho Books.
  • Time tracking: Although Sage Business Cloud doesn’t have built-in time tracking capabilities, you can manually track and record the time spent on different projects using timesheets or external time tracking tools. You can then allocate the recorded time to specific projects within Sage Business Cloud.
  • Budget-minded freelancers and solo entrepreneurs: Sage Business Cloud is well-suited for those who need a simple accounting solution to manage their finances, track income and expenses, and create professional invoices at an affordable price.
  • Small service-based businesses: Businesses offering services, such as consultants, coaches, designers, or agencies, can benefit from Sage Business Cloud. You can track project-related income and expenses, manage client invoicing, and monitor your company’s overall financial performance.
  • Businesses that want to automate their accounting processes: Sage Business Cloud excels with its automated workflows, which will streamline your accounting processes. It can auto-post expenses and payments, making it a great timesaver.

What Is Project Accounting Software?

Project-based accounting software is designed to help businesses track and manage the financial aspects of their projects. It provides tools and features specifically tailored for project-based businesses, such as professional services firms, construction companies, and consulting agencies. Here are some key features commonly found in project accounting software:

  • Project budgeting: This allows you to set project budgets and track expenses against them. It helps in monitoring costs and identifying potential budget overruns.
  • Time and expense tracking: Project team members can record their time spent on different tasks and submit expense reports. The data is then used for project costing and billing.
  • Invoicing and billing: Project accounting software generates invoices based on project work completed and expenses incurred. It allows you to customize billing rates, create detailed invoices, and track outstanding payments.
  • Financial reporting: The software provides comprehensive financial reports—including project profitability, revenue forecasts, cash flow analysis, and project performance metrics. These will help you evaluate a project’s success and make informed business decisions.
  • Integration with other systems: Project accounting software often integrates with other business systems like CRM software, enterprise resource planning (ERP) systems, and payroll systems. These integrations ensure smooth data flow and improve overall operational efficiency.

Frequently Asked Questions (FAQs)

Some key benefits of using project accounting software include accurate project costing, streamlined project management, enhanced invoicing and billing, and clear visibility into project financials.

Project accounting software can be beneficial for a wide range of industries, including professional services, construction, engineering, consulting, and information technology (IT) services. It is particularly useful for businesses relying on project-based work, where tracking project costs and profitability is crucial.

Both cloud-based and desktop project accounting software have their advantages. Cloud-based software offers the benefit of remote access, automatic updates, and data backup, while desktop software provides more control over data and potential customization options. The choice depends on your business needs, budget, and IT infrastructure.

Bottom Line

The best project-based accounting software combines the power of project management and accounting into a unified solution, allowing businesses to track project income and expenses effectively, streamline workflows, and make informed business decisions. By leveraging these tools, businesses can enhance project profitability, improve financial management, and achieve their business goals more efficiently.

About the Author

Danielle Bauter

Find Danielle OnLinkedIn

Danielle Bauter

Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor's degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about travel, food, and books for various lifestyle publications.