What is Job Costing, and what does it mean for your business?

So, what is it?

Job costing means different things to different businesses. However, in general terms, job costing is the allocation of expenses, time, and materials to an individual project, job, item or event. It allows businesses to collect and report revenue and expenses associated with these jobs. Essentially, Job costing can help your business paint an accurate picture of the operational costs.

Job costing is considered to be the most efficient accounting methodology available today.

With a job costing module, your business will be able to view, analyse and track the expenses of the project against the budget. With the ability to draw upon real data in real time, you will be able to make fast and well-informed decisions. Overall, the module will help to improve your businesses operational management.

Who does it work for?

Job costing is mainly used by businesses who have a high dollar value per customer with a relatively low number of customers. Building contractors, subcontractors, architects and consultants often use job costing. If the industry involves undertaking individual projects, jobs, items or events, job costing may be applicable.

How can it help?

Job costing provides the ability to manage business processes and answer questions like:

  • Did we make money on project XYZ?
  • What was our profit on a particular type or group of jobs?
  • How much have we spent on this job to-date, and are we on budget?
  • What resources do we need to complete these jobs successfully?

 

Why should you invest?

Job costing is an important step to ensure that your business stays profitable through individual projects. Other benefits from job costings include:

  1. Better Control

While businesses may be making money, sometimes problems can be hidden in the background. Getting better control of jobs is good for businesses during both upturns and downturns of the economy.

  1. Better Platform for Growth

A good job costing system is the foundation on which businesses can succeed and grow. Not only can it provide a competitive edge, but it also provides a structured framework to expand.

  1. Improved Profitability

By capturing and dissecting all the real costs associated with a job or project, businesses can easily analyse what works and what doesn’t, encouraging a healthy bottom line.

  1. Systemised Approach

A good job costing system should have all the procedures and systems in place to operate a business on a day to day basis. It allows a business to work more like a synchronised machine. Not only does this add value to a company, but the business owner or manager can take a step back from operations. They can now focus on working on the business, instead of working in the business.

Features of Triumph ERP Job Cost Module

  • Comprehensive job costing and management for a wide range of environments
  • Define a hierarchy of cost centres within jobs, jobs within parent jobs, and job groupings at top level
  • Job Quoting creates jobs, budgets, purchase orders/requisitions and inventory requirement lists
  • Job worksheets, customer quotes, supplier requests for quotes, and customer invoices
  • Full Work in Progress recording and reporting, with WIP allocated down to transaction level
  • Capture of expenses for labour, materials, subcontractors, purchases and overheads
  • Optional warnings in job budgets when expenditure is too high, optionally record income in advance
  • Set “cost plus” margin rules on each job centre or cost centre
  • View comprehensive statistics on the job including WIP and purchase commitments

 

If you would like more information on Triumph ERP’s Job costing module and the benefits it can have on your business, contact the Triumph Business Systems office on 1800 653 545, or send an email at info@triumph.com.au.