It sounds like a complicated math word problem, just one that counts for everything (like profits) in business. Job costing is essential for project-focused companies that live and die on exacting, timely estimates and invoicing. From building websites at a media company to houses in the construction field, job costing means accounting for business essentials by the end of each day, week, pay period, whenever it matters. These essentials include:
- Direct and indirect labour
- Project codes
- Material costs
- Overhead
Adding up these critical costs of doing business is key to accurate estimates, projections, and invoicing.
Don’t forget the hidden costs of job costing too. You need to figure in staff time spent on the collection of time cards and manager reviews, plus the hours for the bookkeeper whose work becomes bottlenecked at the end of each project, trying to get that critical invoice out. Then sometimes, even after it’s all said and done, there’s the questioning on the billing, or worse the audit, and the rehashing of all the numbers on the project, once again.
No one ever said job costing was easy. But there is an easier way to make it happen: one that saves time and money, while upping accuracy, reducing errors, and improving the speed of the entire process. Next time you get a headache from job costing, think time tracking with QuickBooks Time.
Let’s break down this job costing word problem. Then add time tracking into the mix.