Job costing · 4 minute read
What does job costing actually show a contractor?
Which jobs made money after materials, labor and subs, and which ones only kept the crew busy. It turns one company P&L into a scorecard for every job.
Why the company P&L isn't enough
A company-wide profit and loss statement tells you whether the year was good. It can't tell you that the two big remodels carried the year while the four small repair jobs lost money. Job costing splits that one report into a report per job.
What goes into a job's numbers
- Income: everything billed on the job, including change orders.
- Materials: supplier bills and receipts coded to the job.
- Labor: payroll hours and wages for time worked on the job.
- Subs: what you paid subcontractors for that job.
Subtract the costs from the income and you have the job's gross profit. Do that for every job and patterns show up fast.
What contractors usually learn
Most owners find at least one kind of job they've been underpricing. Sometimes it's small jobs where drive time eats the margin. Sometimes it's a job type where materials run over the estimate every time. Either way, the next bid gets priced with real numbers instead of a gut feel.
Do I need special software?
No. QuickBooks Online Plus and Advanced both track projects. The real work is coding every cost to the right job, every month, and that's the part most busy owners don't have time for.