How to Track Time and Create Timesheets in QuickBooks Desktop

To track time in QuickBooks Desktop, first turn it on under Edit > Preferences > Time & Expenses > Company Preferences, then enter hours via Employees > Enter Time — either Time/Enter Single Activity for one-off entries or Use Weekly Timesheet for the whole week at once. Assign each entry to a customer or job, mark it billable, and QuickBooks can pull it straight into invoices and paychecks.

Here's the scenario that keeps business owners up at night: Friday afternoon, and your team swears they worked 40 hours on the client's project — but only 28 of those hours made it into an invoice. The rest? Vanished into memory, sticky notes, and "I'm pretty sure I worked on that Tuesday."

That's money you earned and never billed. QuickBooks Desktop's time tracking exists to stop exactly that. Enter hours once, and QuickBooks carries them wherever they need to go — onto customer invoices and into employee paychecks. One entry, used twice.

One thing people mix up: time tracking isn't just for payroll. It's for billing, too. The same hour an employee logs can show up on a paycheck *and* on the client's invoice. That's the whole point — so let's set it up properly.

Before you start: what you’ll need

• Time tracking turned on (we'll do this in Step 1 — takes ten seconds).
• Your employees set up in the Employee Center with their pay rates.
• Service items for the work you bill clients for (like "Consulting" or "Design Work"). Time entries need an item to attach to.
• Payroll items if you want logged hours to flow into paychecks.

How to track time, step by step

Step 1: Turn on time tracking

• Go to Edit > Preferences.
• On the left, choose Time & Expenses, then click the Company Preferences tab.
• Under "Do you track time?", select Yes.
• If you want employees to enter their own time, you can also set the first day of the work week here.
• Click OK. Time tracking is now live.

Step 2: Enter a single activity

Perfect for logging one task as it happens — or for entering time one employee at a time.

• Go to Employees > Enter Time > Time/Enter Single Activity.
• Pick the employee (or vendor, if you track contractor time) from the dropdown.
• Enter the date the work was done.
• Choose the Customer:Job the work was for. This is what connects the hours to a future invoice.
• Select the Service Item (what kind of work it was) and the Payroll Item (how the employee gets paid for it).
• Enter the duration — hours and minutes.
• Check the Billable box if these hours should be invoiced to the customer.
• Add a short note describing the work. Future-you, building the invoice, will thank present-you.
• Click Save & New to log another, or Save & Close when done.

Step 3: Use the weekly timesheet

Logging Friday's hours on Friday is ideal. Logging the whole week on Monday morning is reality. The weekly timesheet is built for that.

• Go to Employees > Enter Time > Use Weekly Timesheet.
• Select the employee and the week (pay period) at the top.
• Each row is a combination of Customer:Job, Service Item, and Payroll Item. Add a row for each type of work the employee did that week.
• Fill in the hours for each day across the row. QuickBooks totals everything automatically.
• Mark rows as billable where they apply, add notes, and click Save & Close.
• Bonus: you can copy the previous week's timesheet as a starting point — a lifesaver for employees whose weeks look similar.

Step 4: Turn tracked time into a customer invoice

This is where time tracking pays for itself.

• Create an invoice: Customers > Create Invoices, and select the customer.
• QuickBooks will pop up a message: this customer has unbilled time/costs. Click OK.
• In the window that opens, go to the Time tab. You'll see every billable hour logged against that customer:job.
• Select the hours to include, click OK, and they land on the invoice with their descriptions.
• Review, adjust if needed, and save. Hours logged → invoice sent. Nothing lost.

Step 5: Turn tracked time into paychecks

• When you run payroll (Employees > Pay Employees), QuickBooks can pull in the hours employees already logged — so you're not re-typing timesheets into paychecks.
• Review the hours on each paycheck before creating it. Time tracking feeds payroll; your eyes are the final check.
• If payroll throws an error while transmitting, [QuickBooks Payroll Error 2000](/quickbooks-payroll-error-2000/) is one of the common culprits — good to know about before payday pressure hits.

Common mistakes to avoid

• Logging time to the wrong Customer:Job. Hours attached to the wrong client won't show up when you invoice the right one. Double-check the job name before saving.
• Forgetting the Billable checkbox. Unchecked means those hours sit in QuickBooks but never surface on an invoice. If the work is billable, check the box every time.
• Mixing up service items and payroll items. The service item is what you bill the client for; the payroll item is how you pay the employee. They serve different masters — pick each one deliberately.
• Entering time against the wrong week. On the weekly timesheet, confirm the date range at the top before filling in hours. Time in the wrong week means wrong pay periods and wrong invoices.
• Not reviewing before invoicing. Time entries with vague notes ("worked on stuff") make for embarrassing invoices. A ten-word note per entry is enough.

Conclusion!

That brings us to the end of this guide on tracking time and creating timesheets in QuickBooks Desktop. We hope the steps explained above helped you capture every billable hour and get them flowing into invoices and paychecks. If you run into any difficulty while following the steps, consider consulting a qualified and experienced QuickBooks professional for further assistance.

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