diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice.py b/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
index a91b4e1..76b50c2 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
@@ -143,6 +143,7 @@
 		self.update_time_sheet(self.name)
 
 		self.update_current_month_sales()
+		self.update_project()
 
 	def validate_pos_paid_amount(self):
 		if len(self.payments) == 0 and self.is_pos:
@@ -181,6 +182,7 @@
 		frappe.db.set(self, 'status', 'Cancelled')
 
 		self.update_current_month_sales()
+		self.update_project()
 
 	def update_current_month_sales(self):
 		if frappe.flags.in_test:
@@ -912,6 +914,13 @@
 						serial_no, sales_invoice
 					)))
 
+	def update_project(self):
+		if self.project:
+			project = frappe.get_doc("Project", self.project)
+			project.flags.dont_sync_tasks = True
+			project.update_billed_amount()
+			project.save()
+
 def get_list_context(context=None):
 	from erpnext.controllers.website_list_for_contact import get_list_context
 	list_context = get_list_context(context)
@@ -991,4 +1000,4 @@
 def set_account_for_mode_of_payment(self):
 	for data in self.payments:
 		if not data.account:
-			data.account = get_bank_cash_account(data.mode_of_payment, self.company).get("account")
\ No newline at end of file
+			data.account = get_bank_cash_account(data.mode_of_payment, self.company).get("account")
diff --git a/erpnext/docs/assets/img/project/project_costing.png b/erpnext/docs/assets/img/project/project_costing.png
index 997e613..c55976d 100644
--- a/erpnext/docs/assets/img/project/project_costing.png
+++ b/erpnext/docs/assets/img/project/project_costing.png
Binary files differ
diff --git a/erpnext/docs/user/manual/en/projects/project.md b/erpnext/docs/user/manual/en/projects/project.md
index d835295..e1e936b 100644
--- a/erpnext/docs/user/manual/en/projects/project.md
+++ b/erpnext/docs/user/manual/en/projects/project.md
@@ -81,13 +81,13 @@
 
 ###Project Costing
 
-The Project Costing section helps you track the time and expenses incurred against the project.
+The Project Costing section helps you track the time, expenses and purchases incurred against the project.
 
 <img class="screenshot" alt="Project - Costing" src="/docs/assets/img/project/project_costing.png">
 
-* The Costing Section is updated based on Time Logs made.
+* The Total Cost is composed of the costing amount from timesheets, the total cost from expense claims and the total cost from purchase invoices created against this project.
 
-* Gross Margin is the difference between Total Costing Amount and Total Billing Amount
+* The Gross Margin is the difference between Total Billed Amount and the Total Cost Amount for this project.
 
 ###Billing
 
diff --git a/erpnext/projects/doctype/project/project.json b/erpnext/projects/doctype/project/project.json
index 101e4ff..5d95bd3 100644
--- a/erpnext/projects/doctype/project/project.json
+++ b/erpnext/projects/doctype/project/project.json
@@ -893,7 +893,7 @@
    "in_global_search": 0, 
    "in_list_view": 0, 
    "in_standard_filter": 0, 
-   "label": "Total Costing Amount (via Time Logs)", 
+   "label": "Total Costing Amount (via Timesheets)", 
    "length": 0, 
    "no_copy": 0, 
    "permlevel": 0, 
@@ -945,6 +945,36 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
+   "fieldname": "total_purchase_cost", 
+   "fieldtype": "Currency", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Total Purchase Cost (via Purchase Invoice)", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 1, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "company", 
    "fieldtype": "Link", 
    "hidden": 0, 
@@ -975,36 +1005,6 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
-   "fieldname": "cost_center", 
-   "fieldtype": "Link", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_global_search": 0, 
-   "in_list_view": 0, 
-   "in_standard_filter": 0, 
-   "label": "Default Cost Center", 
-   "length": 0, 
-   "no_copy": 0, 
-   "options": "Cost Center", 
-   "permlevel": 0, 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "remember_last_selected_value": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "unique": 0
-  }, 
-  {
-   "allow_bulk_edit": 0, 
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 0, 
-   "columns": 0, 
    "fieldname": "column_break_28", 
    "fieldtype": "Column Break", 
    "hidden": 0, 
@@ -1034,8 +1034,38 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
+   "fieldname": "total_sales_amount", 
+   "fieldtype": "Currency", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Total Sales Amount (via Sales Order)", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 1, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
    "description": "", 
-   "fieldname": "total_billing_amount", 
+   "fieldname": "total_billable_amount", 
    "fieldtype": "Currency", 
    "hidden": 0, 
    "ignore_user_permissions": 0, 
@@ -1044,7 +1074,7 @@
    "in_global_search": 0, 
    "in_list_view": 0, 
    "in_standard_filter": 0, 
-   "label": "Total Billing Amount (via Time Logs)", 
+   "label": "Total Billable Amount (via Timesheets)", 
    "length": 0, 
    "no_copy": 0, 
    "permlevel": 0, 
@@ -1065,7 +1095,7 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
-   "fieldname": "total_purchase_cost", 
+   "fieldname": "total_billed_amount", 
    "fieldtype": "Currency", 
    "hidden": 0, 
    "ignore_user_permissions": 0, 
@@ -1074,7 +1104,7 @@
    "in_global_search": 0, 
    "in_list_view": 0, 
    "in_standard_filter": 0, 
-   "label": "Total Purchase Cost (via Purchase Invoice)", 
+   "label": "Total Billed Amount (via Sales Invoices)", 
    "length": 0, 
    "no_copy": 0, 
    "permlevel": 0, 
@@ -1095,8 +1125,8 @@
    "bold": 0, 
    "collapsible": 0, 
    "columns": 0, 
-   "fieldname": "total_sales_cost", 
-   "fieldtype": "Currency", 
+   "fieldname": "cost_center", 
+   "fieldtype": "Link", 
    "hidden": 0, 
    "ignore_user_permissions": 0, 
    "ignore_xss_filter": 0, 
@@ -1104,14 +1134,14 @@
    "in_global_search": 0, 
    "in_list_view": 0, 
    "in_standard_filter": 0, 
-   "label": "Total Sales Cost (via Sales Order)", 
+   "label": "Default Cost Center", 
    "length": 0, 
    "no_copy": 0, 
+   "options": "Cost Center", 
    "permlevel": 0, 
-   "precision": "", 
    "print_hide": 0, 
    "print_hide_if_no_value": 0, 
-   "read_only": 1, 
+   "read_only": 0, 
    "remember_last_selected_value": 0, 
    "report_hide": 0, 
    "reqd": 0, 
@@ -1255,7 +1285,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 4, 
- "modified": "2017-07-26 14:36:20.857673", 
+ "modified": "2017-12-10 08:40:46.843201", 
  "modified_by": "Administrator", 
  "module": "Projects", 
  "name": "Project", 
diff --git a/erpnext/projects/doctype/project/project.py b/erpnext/projects/doctype/project/project.py
index 460ddc6..979c4fc 100644
--- a/erpnext/projects/doctype/project/project.py
+++ b/erpnext/projects/doctype/project/project.py
@@ -1,4 +1,4 @@
-# Copyright (c) 2015, Frappe Technologies Pvt. Ltd. and Contributors
+# Copyright (c) 2017, Frappe Technologies Pvt. Ltd. and Contributors
 # License: GNU General Public License v3. See license.txt
 
 from __future__ import unicode_literals
@@ -25,6 +25,8 @@
 			from `tabTimesheet Detail` where project=%s and docstatus < 2 group by activity_type
 			order by total_hours desc''', self.name, as_dict=True))
 
+		self.update_costing()
+
 	def __setup__(self):
 		self.onload()
 
@@ -68,7 +70,7 @@
 		if self.expected_start_date and self.expected_end_date:
 			if getdate(self.expected_end_date) < getdate(self.expected_start_date):
 				frappe.throw(_("Expected End Date can not be less than Expected Start Date"))
-				
+
 	def validate_weights(self):
 		sum = 0
 		for task in self.tasks:
@@ -174,28 +176,37 @@
 		self.actual_end_date = from_time_sheet.end_date
 
 		self.total_costing_amount = from_time_sheet.costing_amount
-		self.total_billing_amount = from_time_sheet.billing_amount
+		self.total_billable_amount = from_time_sheet.billing_amount
 		self.actual_time = from_time_sheet.time
 
 		self.total_expense_claim = from_expense_claim.total_sanctioned_amount
+		self.update_purchase_costing()
+		self.update_sales_amount()
+		self.update_billed_amount()
 
-		self.gross_margin = flt(self.total_billing_amount) - flt(self.total_costing_amount)
+		self.gross_margin = flt(self.total_billed_amount) - (flt(self.total_costing_amount) + flt(self.total_expense_claim) + flt(self.total_purchase_cost))
 
-		if self.total_billing_amount:
-			self.per_gross_margin = (self.gross_margin / flt(self.total_billing_amount)) *100
+		if self.total_billed_amount:
+			self.per_gross_margin = (self.gross_margin / flt(self.total_billed_amount)) *100
 
 	def update_purchase_costing(self):
 		total_purchase_cost = frappe.db.sql("""select sum(base_net_amount)
 			from `tabPurchase Invoice Item` where project = %s and docstatus=1""", self.name)
 
 		self.total_purchase_cost = total_purchase_cost and total_purchase_cost[0][0] or 0
-		
-	def update_sales_costing(self):
-		total_sales_cost = frappe.db.sql("""select sum(base_grand_total)
+
+	def update_sales_amount(self):
+		total_sales_amount = frappe.db.sql("""select sum(base_grand_total)
 			from `tabSales Order` where project = %s and docstatus=1""", self.name)
 
-		self.total_sales_cost = total_sales_cost and total_sales_cost[0][0] or 0
-				
+		self.total_sales_amount = total_sales_amount and total_sales_amount[0][0] or 0
+
+	def update_billed_amount(self):
+		total_billed_amount = frappe.db.sql("""select sum(base_grand_total)
+			from `tabSales Invoice` where project = %s and docstatus=1""", self.name)
+
+		self.total_billed_amount = total_billed_amount and total_billed_amount[0][0] or 0
+
 
 	def send_welcome_email(self):
 		url = get_url("/project/?name={0}".format(self.name))
@@ -219,7 +230,7 @@
 		self.load_tasks()
 		self.sync_tasks()
 		self.update_dependencies_on_duplicated_project()
-	
+
 	def update_dependencies_on_duplicated_project(self):
 		if self.flags.dont_sync_tasks: return
 		if not self.copied_from:
@@ -289,10 +300,10 @@
 
 def get_users_for_project(doctype, txt, searchfield, start, page_len, filters):
 	conditions = []
-	return frappe.db.sql("""select name, concat_ws(' ', first_name, middle_name, last_name) 
+	return frappe.db.sql("""select name, concat_ws(' ', first_name, middle_name, last_name)
 		from `tabUser`
 		where enabled=1
-			and name not in ("Guest", "Administrator") 
+			and name not in ("Guest", "Administrator")
 			and ({key} like %(txt)s
 				or full_name like %(txt)s)
 			{fcond} {mcond}
diff --git a/erpnext/projects/doctype/project/test_project.js b/erpnext/projects/doctype/project/test_project.js
new file mode 100644
index 0000000..16494f6
--- /dev/null
+++ b/erpnext/projects/doctype/project/test_project.js
@@ -0,0 +1,23 @@
+/* eslint-disable */
+// rename this file from _test_[name] to test_[name] to activate
+// and remove above this line
+
+QUnit.test("test: Project", function (assert) {
+	let done = assert.async();
+
+	// number of asserts
+	assert.expect(1);
+
+	frappe.run_serially([
+		// insert a new Project
+		() => frappe.tests.make('Project', [
+			// values to be set
+			{key: 'value'}
+		]),
+		() => {
+			assert.equal(cur_frm.doc.key, 'value');
+		},
+		() => done()
+	]);
+
+});
diff --git a/erpnext/selling/doctype/sales_order/sales_order.py b/erpnext/selling/doctype/sales_order/sales_order.py
index bb6b0a0..573e9d9 100644
--- a/erpnext/selling/doctype/sales_order/sales_order.py
+++ b/erpnext/selling/doctype/sales_order/sales_order.py
@@ -110,7 +110,7 @@
 				for d in self.get("items"):
 					if not d.delivery_date:
 						d.delivery_date = self.delivery_date
-					
+
 					if getdate(self.transaction_date) > getdate(d.delivery_date):
 						frappe.msgprint(_("Expected Delivery Date should be after Sales Order Date"),
 							indicator='orange', title=_('Warning'))
@@ -191,7 +191,7 @@
 		if self.project:
 			project = frappe.get_doc("Project", self.project)
 			project.flags.dont_sync_tasks = True
-			project.update_sales_costing()
+			project.update_sales_amount()
 			project.save()
 			project_list.append(self.project)
 
@@ -492,7 +492,7 @@
 		target.ignore_pricing_rule = 1
 		target.run_method("set_missing_values")
 		target.run_method("calculate_taxes_and_totals")
-		
+
 		# set company address
 		target.update(get_company_address(target.company))
 		if target.company_address:
@@ -820,4 +820,4 @@
 			order_by='is_default desc')
 	bom = bom[0].name if bom else None
 
-	return bom
\ No newline at end of file
+	return bom