Zoho Books Time Tracking and Project Billing: How It Works

How do projects and timesheets work in Zoho Books?

Time tracking is a module you switch on. In Zoho Books, open Settings, go to the general preferences and tick Time Tracking. A Time Tracking menu then appears with Projects, Timesheet and, if enabled, Approvals.

Each project belongs to one customer. Inside it you add users (the staff who log time) and services or tasks. A service comes from your Items list and carries its own rate and tax; a task exists only inside that project. Time entries are logged against a project and task, and they stay unbilled until you invoice them.

You can also add a budget to a project. Zoho Books offers budget types of Total Budget Cost, Total Project Hours, Hours Per Task and Hours Per Staff, which lets you compare effort against the plan before you invoice.

Which billing method should you choose?

The billing method is chosen when you create the project and decides how logged time turns into invoice lines. Zoho's help pages list the options below. A project's daily or hourly type cannot be changed after creation, so decide early.

Fixed cost projects still benefit from time logging. You will not bill the hours, but the hours tell you whether the fixed fee was priced correctly. Also note that daily rate and hourly timesheets cannot be invoiced together on the same invoice.

How do you set up a project and invoice the time?

1. 1Enable Time Tracking in the general preferences.
2. 2Go to Time Tracking > Projects and click New Project.
3. 3Enter the project name, choose the customer and select the billing method.
4. 4Add a budget if you want to track hours or cost against a plan.
5. 5Add users and set their rates if you bill by staff hours.
6. 6Add services or tasks, marking tasks as billable where relevant.
7. 7Ask the team to log time daily against the right project and task.
8. 8When ready, open the project and choose Create Invoice; the logged time appears in a separate project section on the invoice.

Billable expenses recorded against the customer can be added to the same invoice, which keeps rechargeable costs such as travel on one document. If your team submits expense claims, our Zoho Expense setup guide explains how approved claims reach Books.

How do timesheet approvals and retainer invoices fit in?

Zoho Books has two approval layers for time. Internal approval is switched on in timesheet preferences and then per project, with a Project Manager as approver. Staff group their time entries into an approval and submit it; only the project manager can reject it.

Customer approval sends time entries to the client before invoicing. The customer must have portal access, and you enable projects and timesheets in the customer portal. The client approves or rejects entries there, giving a reason for any rejection, which is recorded under Comments and History. This cuts invoice disputes on time-and-materials work.

Retainer invoices collect money in advance. You enable them in the general settings and point them to a liability account; Zoho suggests Unearned Revenue. Payments can be recorded offline or charged to a saved card, and partial payments on retainers are available in the Global, UK and US editions. Unused retainer amounts show in the Payments Received report filtered by retainer payments.

When should you link Zoho Books with Zoho Projects?

Books has enough project tracking for simple work. If you need Gantt charts, dependencies, milestones, issue tracking or many people collaborating on tasks, run delivery in Zoho Projects and invoice from Books.

According to Zoho's documentation, the integration is available on the Professional, Premium, Elite and Ultimate plans. Projects linked to a primary customer come across with their tasks and bugs, and billable, approved timesheets sync into Books. Users on those timesheets become project staff users in Books. You need to be a Zoho Books admin and the Zoho Projects portal owner to set it up.

Watch two details. Projects without a primary customer will not sync, and a currency mismatch between the customer in Books and the project can cause sync failures. If Zoho CRM is also connected, CRM-synced customer and project details take priority.

What changes for clients in different markets?

• USA and Canada: set the correct sales tax, GST/HST or PST on service items, because services are often taxed differently from goods and the rules vary by state and province.
• UK and EU: day-rate billing suits contractors; make sure the VAT treatment of services to overseas clients is set on the item or customer before you invoice.
• UAE and Saudi Arabia: project invoices must still meet local VAT invoice rules, and in Saudi Arabia the ZATCA e-invoicing setup in the Saudi edition applies to them too.
• India: service items carry SAC codes for GST, and invoices raised from projects follow the same GST and e-invoicing settings as any other invoice.
• Online payments: Zoho's help pages list Zoho Payments for the US and India, and gateways such as Stripe and PayPal with wider coverage. Check what is available in your country.

What should you plan before you start?

Billing setup is hard to change once invoices exist, so agree these points with the delivery and finance teams first.

• Which billing method each type of engagement uses, and whether any are daily rate.
• Staff and task rates, and who is allowed to change them.
• Whether you need internal approval, customer approval or both.
• Where projects live: Books only, or Zoho Projects synced into Books.
• How retainers are applied and reported each month.
• A rule that time is logged daily, not at month end.

Flowpeak configures project billing in Zoho Books and the Zoho Projects integration for service firms, working remotely from Chennai. We map your engagement types to billing methods and test invoices before go-live. The work is quoted in writing after a free scoping call.

Frequently asked questions