Increase Your Profitability With Precise Job Costing

By Adriane Reams, CPA

September 5, 2018

In the construction industry, job costing can mean the difference between making money and losing money. The stakes are high when rising labor prices, cost of goods, and more are factored in.

Job costing allows your business to estimate in a way that prevents overruns on future jobs, minimizes expenses, and provides information for job scope and future proposals. That’s why accurate, timely, and consistent job costing procedures are critical.

“Oftentimes, we see clients who have potential profitability falling through the cracks,” says CPA and Manager Adriane Reams. “By job costing, you can estimate the cost of a job appropriately to help increase profitability and track if your costs are getting too high.”

How to Job Cost

To begin the job costing process, it’s important to understand the difference between direct and indirect costs. Direct costs include costs that are directly related to the specific job, such as labor, materials, and equipment. Indirect expenses are trickier to manage but include many labor burden costs and overhead-related items such as insurance, human resources, accountants, rent, and utilities.

Job costing starts during the proposal process and continues with weekly project management check-ins. Job costing allows you to build an expense history, organize change orders, and give insights into what it will take to perform future jobs.

Get in Touch

We’ll start by discussing a strategy that works best with your operation, assisting in determining job costs, choosing a software program, or assisting with implementation in your current software program to accomplish your goals.

We want to help your business catch every cost and stay profitable. Please contact us to assess your job costing needs.