If you are looking to determine how profitable jobs will be and how profitable completed jobs have been, a job cost software module is a necessity. Job cost software enables a deeper understanding of which areas of your jobs are costing you money and which areas are your biggest earners. A job cost software module allows you to determine a job’s true cost before you begin the project and as it progresses. Find out about the variety of job cost options on the market and how they can benefit your business in this article.
Job cost software facilitates the assignment of costs to individual cost categories in order to enable improved cost control and job profitability analysis.
Critical business benefits made possible with job cost software include:
|Labor costing||Labor costing features allow for the collection of costs associated with the time spent working on a job and can include time and attendance tracking and hourly labor rate assignments|
|Equipment costing||Equipment costing capabilities allow for the assignment of equipment rental or acquisition costs to specific jobs and include management for complex situations such as split job cost or direct/indirect cost divisions|
|Material costing||Material costing allows for tracking expenditures on supplies and other materials used in the execution of job work|
|Subcontractor costing||Subcontractor costing allows for the management of costs incurred through hiring subcontracted service providers|
|Customizable cost categories||Customizable cost categories allow for more granular specification of cost types than what can be provided through predefined cost categories|
|Job phase tracking||The ability to divide jobs into different phases enables another reporting dimension useful to improving visibility of where money was spent in the execution of more complex jobs|
|PO and customer payment tracking||The ability to reconcile customer purchase orders and payments to individual jobs enables better visibility for ensuring complete cost capture for incurred job costs|
|Inter-job profitability/expense reports||The ability to compare profitability between jobs can reveal important business insights about causes of cost over-runs or reveal info about the most profitable type of jobs to pursue|
Job costing software is common in any business that needs to apply costs to jobs. A job simply refers to work performed on a project basis, as opposed to ongoing operations. Contractors are a good example of a type of business that would use job costing software. The type of costs job-tracking software tracks include: labor, overhead, materials, equipment, sub-contractors, and miscellaneous expenses.
It’s tempting to simply pursue the biggest jobs. But these jobs are not always the ones that allow you to make money the most efficiently. Job costing identifies the most profitable parts of your business so you can pursue jobs that play to your strengths. Identifying the least profitable parts of your jobs shows you what you need to get better at, or potentially what work you’d be best served to leave to someone else.
As the number and complexity of jobs increases, tracking revenue and costs by hand or through spreadsheets becomes tedious, expensive, and prone to errors. Job costing software ensures accounting accuracy. It also decreases the time you spend tracking costs.