Glossary
Job costing
Also called: job cost accounting · job profitability
Job costing is tracking the revenue and direct costs of each individual job, so you can see what every job actually made rather than only what the company made overall.
Every job gets an identifier, and every invoice, material purchase, sub bill and hour of labor that belongs to it is recorded against that identifier. The result is a profit figure per job — and, rolled up, per type of work, per crew or per truck.
The part most attempts miss is labor. Materials arrive with a receipt; hours do not. A job costed without labor, or with labor at the bare wage rather than the burdened rate, will look profitable when it was not.
Overhead stays out of it. Rent, office wages and general insurance are real costs, but no single job causes them, and mixing them in produces a number that looks precise and means nothing.
Why it matters to a contractor
Company totals tell you whether the year was good. Job costing tells you which work made it good and which work quietly lost money — the only information that changes what you quote, what you chase and what you turn down.
Work it out on your numbers