# How to job cost bill records in Xero

In Xero, create each tracking option or Project, tag each bill line with the tracking option or Project using tracking categories and run a cost-by-tracking option or Project report each month.

Job costing supplier bills means tagging each bill line to a job so you can see cost against budget for every job.

## Before you start

- Tracking categories or Xero Projects

## The Xero way

Where to find it: Accounting > Accounting settings > Tracking categories; Projects > All projects

1. Create a Job tracking category with one option per job, or create a project (Projects > All projects).
2. Code each bill line to the tracking option, or assign the line to the project on the bill.
3. Run Profit and Loss by tracking category, or the project reports, for job cost.

## Limits in Xero

- Two active tracking categories (four in total).
- A project must be in progress before you can assign a bill to it. You cannot assign to a draft or closed project.
- You need the edit all projects permission to assign bill lines to a project.
- Xero Central says tracking is not designed for job costing. Xero Projects is the tool for that.

## Good to know in Xero

- In Projects you can add estimated expenses and compare them with actual bills. Only assigned bills and spend money are posted to the general ledger and standard reports.

## The Pulsify way

1. Forward the supplier's invoice to Pulsify. Pulsify reads every row as its own line.
2. Review each line's account and set the job where it applies.
3. Route bills to the person who knows the job, using approval rules.
4. Approve. The bill is created in Xero with each line.

Pulsify connects to Xero in one click. Approved bills are created in Xero with the source file attached.

What Pulsify does not do here:

- Pulsify does not split lines by percentage.
- Job reports are run in Xero.

## Example in Xero

Example Steel Supplies sends one bill. You have a Job tracking category with options Job 201 and Job 202. Amounts are ex GST.

- Steel for Job 201: $5,400.00 (Tracking option: Job 201)
- Steel for Job 202: $2,100.00 (Tracking option: Job 202)
- Freight for Job 201: $150.00 (Tracking option: Job 201)
- Freight for Job 202: $50.00 (Tracking option: Job 202)

Job 201 costs $5,550.00 and Job 202 costs $2,150.00 before GST. Run the Profit and Loss by tracking category to see both.

## Common mistakes

- Planning on three active tracking categories. Only two can be active at any time.
- Trying to assign a bill line to a draft or closed project.

## Common questions

### Should I use tracking categories or Xero Projects to job cost?

Use a Job tracking category with one option per job to report by job. Use Projects if you want estimated expenses compared with actual bills.

### How many tracking categories can I have?

Four in total, but only two can be active at any time.

### Why can't I pick a project on my bill?

A project must be in progress. You cannot assign a bill to a draft or closed project and you need the edit all projects permission.

### Can Pulsify split by percentage?

No. Enter separate lines with set amounts.

## Sources

- https://central.xero.com/0/article/Set-up-tracking-categories
- https://central.xero.com/0/article/About-Xero-Projects
- https://central.xero.com/0/article/Add-an-expense-to-a-project
- https://central.xero.com/0/article/Add-and-approve-bills

Source: https://www.pulsify.tech/how-to/job-cost-supplier-bills-in-xero/ (last checked 2026-10-19)