Yes, you may believe that job costing is a challenging facet of construction accounting! But with the right training and customization, you can easily master QuickBooks to achieve your goals!
Why Construction Job Costing Matters
Contractors and manufacturers must be able to accurately predict, record, and control the cost of each job. You’ll need to track and monitor materials, labor, subcontractors, & equipment costs (and invoicing) for each project.
But affordable, off-the-shelf software such as QuickBooks® needs customization to meet your specific needs. And before you can customize it, you’ll want to learn how its systems and sub-systems work together – plus how to make the right entries to turn it into the construction job cost system you need for your company.
What Can Go Wrong With Profits in Construction (or Manufacturing) Jobs?
Have you (or anyone else in your company) ever made errors in estimating how much a job will cost? Or how much profit you will make?
Even with excellent estimates in place, construction and manufacturing projects can experience volatile profit margins. For example, think about the unpredictable costs of materials, or labor overruns. And don’t forget about those external conditions such as weather or changing regulations.
No matter how carefully you prepare your quotes, “stuff happens.”
Your job costing software, however, can help you maximize your profits by accurately keeping track of your construction job costs throughout the entire process so you’ll be able to see if you need to take corrective action as the job progresses.
What Can Happen to Your Estimated Construction Job Cost?
Predicting job costs is fairly straightforward in some industries. Owners may have a good idea about how much materials will cost, how much they pay their employees, and additional costs, such as insurance and taxes.
But in manufacturing or construction, it’s not as clear-cut. For example:
- A job that usually takes a week could be set back by unforeseen circumstances – such as weather or delays in material deliveries.
- If fuel prices suddenly rise, the cost of materials and deliveries could rise as well.
- When your employees get started on the job, they may encounter unexpected complications – or make errors that need to be corrected. This increases your labor (and materials) costs.
- You may even need to employ a subcontractor or rent additional equipment to address other complex problems.
The ways a job can ‘go sideways’ and lose money can turn into a series of costly misadventures!
INSTEAD: Get trained in how to build an intelligent design into your QuickBooks® software. When you do that, you’ll get to:
- Create a database that helps you more accurately predict costs so you can charge the right price,
- Monitor and keep costs under control (and charge for Change Orders) as a job progresses, and
- Learn how to stop cost leaks and improve processes.
Other Ways Your QuickBooks® Software Can Help Control Construction Job Cost (&Profitability!)
During a job, access reports that show you where you are in the process. Look for the following:
- How is the job progressing? (In logical order?)
- Look for Estimates vs. Actuals reports. (They show estimated costs, actual costs, and favorable or unfavorable variances as you progress through a job.)
- What are your remaining open Purchase Orders? (The reports will list items, quantities, and costs yet to be incurred.)
- Where are the problems? (What kinds of corrective action will you take before the situation gets totally out of hand?)
Based on this information, you can ADJUST your job assignments and plan of action as needed.
Learn How Construction Job Cost Software Can Help Your Business…
Our mission is to help small-to-mid-sized business owners and bookkeepers handle their project-oriented businesses in the most efficient and profitable ways.
We offer affordable workshops and training specific to job costing using software such as QuickBooks® desktop and Excel. We love teaching and coaching, 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 you’d like answered before moving forward, please send us an email or call, and we’ll be happy to spend more time to learn more about you and your business.
We look forward to hearing from you and learning more about how we can help…
Customer Praise For Diane Gilson, Info Plus Accounting, and BuildYourNumbers.com
⭐⭐⭐⭐⭐ From the Intuit FindAProAdvisor 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!”