Xero Projects answers a question that a lot of small service businesses cannot otherwise answer: did that job actually make money. It tracks time and costs against a project, compares them with what you quoted, and shows the margin. For agencies, consultancies, builders and anyone else quoting fixed prices, that is the number the business runs on.
What it does well
The link to invoicing is the point. Time and expenses recorded against a project can be pulled straight onto an invoice, so billable work does not quietly go unbilled. In service businesses, unbilled time is one of the largest and least visible sources of lost margin, and closing that gap usually pays for the module several times over.
Time entry is simple enough that people actually do it, including from the mobile app. A time tracking tool that the team ignores produces worse data than no tool at all, so the low friction matters more than any individual feature.
Because it sits inside Xero, project costs pull from real supplier bills rather than from estimates typed into a separate system. The profitability figure is therefore grounded in your actual ledger.
Where it falls short
It is job costing, not project management. There are no Gantt charts, no task dependencies, no resource levelling and no team collaboration features. If you need to plan and run the work as well as cost it, you will be running this alongside a proper project tool, not instead of one.
The allowance is tied to the Ultimate plan at £65 a month excluding VAT for ten users, which is a significant step up if you are otherwise happy on Grow. Work out whether the margin visibility justifies the tier jump, because for some businesses it plainly will and for others it plainly will not.
Reporting is limited to what Xero provides. Businesses wanting detailed utilisation analysis or forward looking resource forecasts will find the ceiling quickly.
The UK detail that matters
Nothing here is UK specific in the compliance sense, which is worth saying plainly rather than inventing a tax angle. The relevant UK consideration is that project costs and time feed the same VAT and CIS treatment as the rest of Xero, so construction businesses tracking subcontractor costs against jobs get consistent treatment without a second reconciliation.
Who should buy it
Xero users who bill by project or job and currently guess at profitability. If you are already on Ultimate it is included and there is no reason not to use it. If you are on Grow, price the upgrade against the value of knowing your real margins, and compare against a dedicated tool such as monday.com or Asana if you also need to plan the work.
Xero
Microsoft 365