Before tracking actual work in a project plan, you should save a baseline. This gives you a “snapshot” of your initial project plan for later comparison against actual progress. This is one way to tell if your project is on track or not.
The ability to track actual work in a project plan is a major advantage that a real project management tool like Project has over list-keeping tools like Excel. In Project, you can track actual work at a very broad or very granular level.
The Project Guide helps you set up your project plan correctly for the level of tracking you want to do.
To properly evaluate a project’s status after you begin tracking requires a combination of recording accurate data in Project and using your good judgment when interpreting the results.