You'll notice in the Plan & Track section of the job, that you may see an "Associated Contract Item" option underneath the job phase name. This becomes visible when there is a draft or active contract on file for the job, and the Plan&Track section is currently in edit mode. What this does is let you select which line item on the contract you want each job phase in Plan & Track to point to, and this will come into play depending on which contract type you are working on:
Fixed Price Jobs
For fixed price jobs, the associated contract item is only used when you are first creating a draft of the contract/bid. You can choose a line item as the associated contract item for one of your job phases, and this will ensure that any costs budgeted for that phase in Plan&Track, will show up on the contract with the ability to mark up.
For example, I have budgeted costs here for my 'Painting' job phase, and I've selected the Painting line item as the associated contract item for this phase:
On the contract, when I locate the Painting line item, I can see the costs I budgeted in plan&track show up here with an option for me to mark up.
Cost Plus/Time and Materials jobs
The associated contract item plays a bigger role in Cost Plus jobs. When you select the associated contract item for each job phase, this determines where the costs (labor/expenses/subcontractors) are going to point to on the contract. When you have time and materials deliverables, it is important to ensure that the contract items in which you are invoicing for time and materials, have the job phases pointing to those items so that the invoice populates those costs automatically on the invoice.
Then I can ensure that the costs for each of my job phases are pointing to the deliverable that best fits how I plan on billing for those costs:
When Plan&Track is Active
As mentioned above, you can only select the associated contract item when the Plan&Track section is in edit mode. Once Plan&Track is active and tracking your cost to date in real time, you can hover over the left side of the job phase to confirm the associated contract item, if you ever needed to confirm where the job phase is pointing without having to edit: