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Construction Job Costing

Job costing is a difficult part of construction & manufacturing accounting, but with the right training you can easily use QuickBooks!

Job costing is the most complex aspect of construction accounting or manufacturing accounting. Contractors and manufacturers must be able to accurately predict, record, and control the cost of each job. Materials, labor, subcontractors, & equipment need to be tracked and monitored for each job. But, with the right training, you can easily convert off-the-shelf software (e.g., QuickBooks) into a construction job cost system, or a manufacturing job cost system.

Construction Job Costing

How do you estimate how much a manufacturing project or construction job will cost and how much profit you will make?  Have you ever estimated these numbers incorrectly? Construction jobs and manufacturing projects can have a volatile profit margin due to the number of unforeseen factors that can come into play, such as unpredictable costs of materials, labor over-runs, and external factors such as weather or changing regulations.

No matter how carefully you estimate the cost of a job, there is always room for human error. Job cost accounting software, however, can help you maximize your profits by accurately keeping track of your construction job costs throughout the entire process so that you can see if you need to take corrective action as the job progresses.

What Can Happen to Your Estimated Construction Job Cost?

In some industries, predicting job costs is fairly straightforward. Owners may have a good idea about how much materials will cost, how much they pay their employees, as well as additional costs, such as insurance and taxes. But in manufacturing or construction, it’s not so straightforward. A job that usually takes a week could be set back by unforeseen circumstances. If fuel prices suddenly rise, the cost of materials and deliveries could rise as well. In other cases, a job may seem routine, but once your employees get started on the job they encounter unforeseen complications – or they make errors that need to be corrected.  This increases the amount of time and materials required to complete the job, and increases your labor and materials costs. You may even need to employ a subcontractor or rent additional equipment. The ways that a job can ‘go sideways’ (i.e., lose money) can turn into a series of costly misadventures!

Building an intelligent design into your manufacturing or construction job cost software can help you more accurately predict costs, keep them under control as a job progresses, and turn out a successful profit.

How Can Software Help Control Construction Job Cost?

During a job, you can use your software to access reports that show you where you are in the process. Reports can be prepared to show estimated costs, actual costs, and favorable or unfavorable variances as you progress through a job.  These software-generated job-cost reports:

  • Tell you how the job is progressing
  • Let you track – by job stage – actual job costs against estimated job costs
  • Display remaining outstanding purchase orders (they list items, quantity, and costs yet to be incurred)
  • Reveal where the problems are, so that you can take corrective action before the situation gets totally out of hand

From this information, you can choose to adjust your job assignments and plan of action as needed.

Ready To Learn How Construction Job Cost Software Can Help Your Business?

BuildYourNumbers.com offers workshops and training specific to job costing and accounting software. Our main goal is to help small-business owners handle their businesses in the most efficient and profitable ways. We love teaching, so if you’re ready to learn, we’re here for you. You can sign up for any of our workshops or training tutorials, and learn what you need to know 24/7.  If you have any questions that you’d like answered before moving forward, please send us an email or call, and we’ll be happy to answer any question you may have. I look forward to meeting you and learning more about how we can help your business.

From the Intuit Find a ProAdvisor website…
“I’ve known Diane for almost 20 years. She helped me set QuickBooks up when I first started my business in 1997, and I have consulted with her many times since with questions. I’ve always found Diane to be positive and helpful. She is willing to spend as much or as little time as I need to solve a problem or answer a question. I recommend Diane and her staff at Info Plus Accounting wholeheartedly!”