Xero Projects (project mode for residential builders)

TL;DR

Xero Projects is Xero’s bolt-on add-on for tracking time, materials, expenses, and profitability per project. For residential builders it sits between vanilla Xero (which has no native job-costing) and dedicated estimating + job-costing software (Buildxact, Cubit). Cost in 2026 is $7-$10 per active project per month on top of Xero base. Value is good for builders running 3-15 active jobs who want job-level profit but don’t yet need full estimating software. Limits are around quoting, takeoff, and trade-bid management, all of which are not what Projects is built for.

What Xero Projects does

Xero Projects adds, to a standard Xero subscription:

Project records: one project per job, with client, status, dates, location.
Tasks within a project: subdivide the work (e.g. “Slab”, “Frame”, “Lockup”).
Time tracking: timesheets logged against project + task.
Expenses: bills and bank transactions assigned to a project.
Invoices: client invoices linked to a project.
Project budget: total estimated cost and revenue per project, with live actual vs budget.
Profit / loss per project: live calculation of project profit.

The data is the same Xero data; Projects is a categorisation layer plus reporting.

What it doesn’t do

Feature	Xero Projects	Dedicated estimating software
Takeoff from plans	No	Yes
Cost library	No (manual entry per item)	Yes
Quote generation	Yes (Xero quoting)	Yes
Trade bid comparison	No	Yes
Subcontractor scheduling	No	Yes
Time tracking against budget	Yes	Yes
Project profitability	Yes	Yes
BAS / accounting integration	Yes (native Xero)	Via Xero sync
Client portal	No (Xero customer portal only)	Yes

For a residential builder running 5-10 jobs and wanting to track profit per job AS PART OF Xero, Projects is a fit. For a builder needing full estimating + takeoff + trade management, Buildxact or Cubit is the answer (with Xero or MYOB underneath for accounting).

When Xero Projects is worth turning on

Builder profile	Xero Projects
1-2 jobs, $200k each	No, just use Tracking Categories or job names in invoice descriptions
3-10 jobs, $300k-$800k each	Yes, the per-project profit visibility is worth $50/month
10+ jobs, large variations	Marginal, consider Buildxact or full ERP
Custom architectural with detailed selections	Marginal, Buildxact better
Multi-trade head contractor with bid management	No, get specialist software

Setup

Subscribe to Xero Projects as an add-on within Xero ($7-$10 per active project per month).
Create a project per job at contract signing.
Define standard tasks per project type:
- Common residential template: Site set-up, Slab, Frame, Lockup, Fixing, External, Practical Completion, Defects.
Set the project budget: total estimated direct cost + margin per project.
Assign invoices and bills to projects as they’re entered.
Run timesheets against project + task (if you have employed labour).
Generate the client invoice from within the project (Xero links it automatically).

Reporting

Standard Projects reports:

Project Summary: profit, revenue, cost, budget vs actual for each project.
Time Summary: hours by employee, by task.
Project Detail: drill-down to each bill, invoice, timesheet entry.

These are the reports a residential builder should look at weekly:

Report	What it tells you
Project Summary	Which jobs are profitable, which are bleeding
Project Detail	Why a project is bleeding (where the cost overran)

Xero Projects vs Tracking Categories

Vanilla Xero has Tracking Categories (up to 2 dimensions, e.g. “Job” and “Trade”) that can be applied to invoices, bills, and bank transactions. Tracking Categories are FREE and work for basic job-level reporting.

Feature	Tracking Categories	Xero Projects
Job-level revenue/cost	Yes	Yes
Budgets per job	No	Yes
Tasks within a job	No	Yes
Live budget vs actual	No	Yes
Time tracking against jobs	Limited	Yes
Cost per project per month	$0	$7-$10

For 1-3 jobs, Tracking Categories often work. For 4+ jobs with budget tracking needs, Projects is worth the cost.

Common builder errors

Not assigning every bill to a project: a $5,000 supplier bill missed off the project allocation makes the project profit look better than it is. The Project Detail report has gaps.
Over-engineering the tasks list: 30 tasks per project means timesheet entry is admin-heavy. 6-10 tasks per project is the sweet spot.
No project budget set: without a budget, the budget-vs-actual report has no baseline.
Time tracked at the wrong level: timesheets entered against the project but not against tasks means the per-task profitability is missing.
Projects subscribed but not actually used: $10/month per project for 10 projects = $1,200/year that’s literally wasted if the data isn’t reviewed.

Integrating with Buildxact

If a builder is using Buildxact for estimating + scheduling, Xero handles the accounting + payroll, and Projects can layer profit tracking back into Xero.

Two integration approaches:

Buildxact pushes invoices and bills to Xero: each Buildxact job maps to a Xero Project. Done via Buildxact’s built-in Xero sync.
Manual mapping: bills are entered in Xero with manual Project assignment, mirroring Buildxact job names.

For a builder graduating from “Xero only” to “Buildxact + Xero”, the Projects data carries forward to give comparable profit reporting.

For builders

Trial Projects on one job for a month before committing across all jobs. The admin overhead of project assignment is real.
Set the project budget at contract so the budget-vs-actual report has the baseline.
Standardise tasks across projects so reporting is comparable.
Assign every bill at receipt, not at end-of-month. Reducing the project allocation backlog is the discipline that makes Projects valuable.
Review the Project Summary weekly. A bleeding job spotted at week 4 of a 24-week build can be saved; the same insight at week 22 is just an autopsy.

References

Xero Projects feature page: https://www.xero.com/au/features/projects/ (verified 2026-05-15).
Xero pricing: https://www.xero.com/au/pricing/ (verified 2026-05-15).
Australian Taxation Office