A service business rarely has the billing problem a product business has. The problem isn't tracking stock, it's tracking time: which hours went to which client, which of those hours are actually billable, and whether a project came in under or over its budget once every hour is added up. Zoho Books has a built-in feature for exactly this, called Projects, sitting inside the Time Tracking module. This post covers when it actually earns its place, how to set it up and use it, and the reports it gives you once it's running.
When to Use It
Projects is built for businesses that earn income based on hours spent, tasks completed, or a fixed project rate, rather than a fixed-price product sold off a shelf. That covers consulting, professional services firms, agencies, freelancers, and any team billing clients for time. If your business sells physical products at a set price, Projects generally has nothing to offer you; that's what the standard Items and Invoices workflow already handles well.
Worth checking before you plan around it: Projects and Time Tracking are available only on certain Zoho Books plans. Confirm it's included in your current plan before building a workflow that assumes it's there.
A useful way to decide: if you've ever had to manually reconstruct "how many hours did we actually spend on this client last month" from memory, a spreadsheet, or a separate time tracking tool, Projects is solving a real problem for you. If your invoicing has never once depended on hours or tasks, it isn't.
How to Use It
Step 1: Enable Time Tracking
Go to Settings, click General under Preferences, and check the Timesheet option under the list of modules you can enable. Click Save. Projects then becomes available from the Time Tracking menu.
Step 2: Create a Project
Go to Time Tracking → Projects → New Project. Enter a project name and description, and select the customer this project is billed to. You can also enable customer approval for time entries, which requires the client to approve logged time before you invoice it, useful when a client wants visibility into hours before they're billed.
Step 3: Choose a Billing Method
This is the decision that shapes everything downstream, so it's worth getting right at project creation rather than changing midway through.
| Billing Method | How it works |
|---|---|
| Fixed Cost for Projects | One flat rate set at the start. The customer is invoiced for that total on completion, regardless of hours actually logged. |
| Based on Project Hours | One rate per hour for the whole project. The customer is billed for total hours logged, whoever logged them. |
| Based on Task Hours | A separate rate per hour set per task, useful when tasks differ in skill level or complexity. Each task can also be marked billable or not. |
| Based on Staff Hours | A separate rate per hour set per staff member. A senior consultant and a junior team member logging time on the same project bill at their own individual rates. |
| Based on Daily Rate | Time is logged in Full Day or Half Day units instead of hours, and the customer is invoiced by day rather than by hour, with the option to set a different daily rate per user. |
Step 4: Log time
Time can be logged two ways: a manual time entry, where you select the project, task, and duration and save it, or a live timer, started when work begins and stopped when it ends. For entering several entries at once, the Weekly Log view lets you record time across multiple projects and tasks in one screen, marking each entry billable or non-billable as you go.
Step 5: Set a budget (optional but worth doing)
When creating or editing a project, you can add a Cost Budget, the amount you expect to spend delivering it, and a Revenue Budget, the amount you expect to bill the client. Zoho Books then tracks actual spend and actual billing against these figures, and the Profitability Summary on the project overview page shows how the project is actually performing against what you planned.
Step 6: Convert tracked time into an invoice
Go to New Transaction, select Create Invoice, and generate a billable invoice built from the logged hours. For recurring client billing, Recurring Invoices has an Associate Projects Hours option that automatically pulls in any unbilled timesheets up to the date of each recurring invoice, so you're not manually rebuilding the same invoice logic every billing cycle.
From logged time to invoice, with the Profitability Summary tracking actuals against budget the whole way through.
Benefits
- Nothing billable gets missed. Time logged against a project stays visible as unbilled until it's actually invoiced, rather than living in someone's notebook or a separate spreadsheet that nobody reconciles against invoicing.
- Real profitability visibility, not a guess. Comparing budgeted hours and cost against actual logged hours and revenue tells you whether a project made money, not just whether the invoice got paid.
- Rate flexibility matches how service businesses actually price. Five billing methods cover flat-fee work, uniform hourly billing, task-based skill pricing, staff-based seniority pricing, and day-rate consulting, without needing a workaround for any of them.
- One system instead of two. Time tracking and invoicing live in the same application, so there's no export-import step between a separate timesheet tool and your accounting software, and no reconciliation gap between the two.
Reports Available
Projects gives you three reports that drill into each other, from a portfolio-wide view down to individual time entries.
Project Summary
The top-level view, comparing every project's logged hours and amount against budgeted hours and amount, and billable versus non-billable hours and amounts. This is the report to open first when you want a fast read on which projects are on track and which are quietly running over.
Project Details
Click into a project from the Project Summary report and you land here: a task-by-task breakdown showing logged hours, billable hours, billed hours, and billed or unbilled amount for each task. This is where you catch a specific task that's eaten far more time than planned, rather than seeing only the project-level total.
Timesheet Details
Drill down once more from Project Details and you reach individual time entries, filterable by date, task, user, and project. This is the level you'd use to resolve a specific billing dispute or verify exactly when and by whom a block of time was logged.
All three reports can be customised by customer, project, task, or staff member, and exported as PDF, XLS, or CSV, or opened directly in Zoho Sheet for further analysis.
Frequently Asked Questions
Where to Go From Here
Once tracked time turns into an invoice, how that invoice actually looks matters too. Our custom invoice formats guide covers what's editable on which Zoho Books plan.
We set up Zoho Books Projects for service and consulting businesses.
From choosing the right billing method to budgets, timesheet workflows, and the reports that actually tell you whether a project was profitable, we configure Zoho Books around how your firm bills for time.
Talk to an Expert → Book a Call Today →