Home
>
Small Business
>
Job Costing - Do You Know How?

Job Costing - Do You Know How?

What's your job profitability? I meet with business owners every day that are unsure of their profitability at a company or job level. They "think" they are making money because they have a few dollars in their checking account. Having money in your checking account doesn't mean you are profitable. It might mean you haven't paid all the bills yet, so you have a little cash. Cash and profit are two different concepts. If you aren't profitable, you won't have longevity in your business.

It doesn't matter the size of your business or the industry. Profitability is something you should be monitoring on a regular monthly basis. No business is too small or too large to do job costing. Such an excuse is your way of not holding yourself accountable to managing your business wisely. Failing to plan is a plan for failure.

So what do I mean by job costing? You should know how much you make and spend on each job. Expenditures should be tracked for those direct labor and material costs to each job. In addition, you should also be tracking overhead costs and allocating them to your various jobs as applicable. There is always going to be some overhead that is considered general overhead. Though often times too many dollars are thrown into general overhead, when they could easily be tracked to specific jobs. If you don't know your exact income and expenses for each job and your overall business, then how can you know you are making a profit?

QuickBooks? has easy-to-use features that allow you to do job costing for time and materials. So don't worry about having to track it all manually. Rely on tools to help you run your business more efficiently and effectively.

Are you curious how you are doing with job costing measurements? Here are some quick and easy questions to gauge your job costing performance:

1. Do I track each customer's revenue information through a detailed invoice?

2. Do I have a way of breaking down my direct job materials cost by customer?

3. Do I associate all time spent to each job accurately with actual dollar amounts?

4. Do I have access to reports to monitor profitability on each job in a timely manner?

5. Do I have a way to trend the fluctuations in job profitability from job to job, month to month, etc?

If you answered "NO" to any of these, then it's time for you to take an objective look at your financial goals. It's time for you to implement a job costing mechanism to help you answer "YES" to these questions. How can you track your profitability and long-term growth plans if you don't have detail at a job level?

Here are some quick and easy ways to utilize QuickBooks? effectively to help you with your job costing process:

1. Set up the QuickBooks? Item list so that you'll have both an expense and an income aspect to each of the items. This will allow you to track your costs and your income; therefore, providing you profit by item.

2. Record your sales through the invoicing or sales receipt process. This will record the income aspects of the items.

3. As you purchase the product or service items, make sure that you utilize the Items tab so that it will record to the cost to the appropriate item. In addition, make sure to assign your customer/job information to each line item so that you'll have the costs associated to the appropriate customer/job for job costing.

4. Utilize the time tracking mechanism in QuickBooks? so that you and your employees can track their time by item and customer/job. No dollar value is associated with this time until you actually pay the employees within QuickBooks?.

5. QuickBooks? has preformatted reports that you can access to have job costing information right at your fingertips. These are found under the Reporting menu and the Jobs/Time/Mileage option.

6. QuickBooks? has the ability to provide reports for any time period you select. This will allow you to have a variety of detail over the growth of your business and to produce trending reports. You can modify the report as needed to meet your needs.

One additional important aspect is that you have a good accounting professional on your team of resources. They will be able to help you understand what these reports are telling you in terms that you can use. Reports alone don't provide value if you don't understand them. So it is key that you understand the reporting information and how you can utilize that information to assist you in decision-making as you grow your business profitably.

It's all about how you set-up your accounting/bookkeeping software package and how you use it! What justification can you give for not knowing job costs within your business? None! Challenge yourself today to become more adept at running a financially savvy business through job costing.

Contact: Pam is the author of Out of the Red, a Certified Management Accountant, and a Certified QuickBooks? ProAdvisor. QuickBooks? is a registered trademark of Intuit. 816.304.4398. http://www.rppc.net

kitchen deep cleaning Deerfield ..

In The News:

Airport workers report surge in fake lost luggage claims as scammers retrieve discarded baggage tags containing passenger names and travel information.

Unlike robotaxi competitors, Tensor focuses on consumer-owned self-driving cars that adapt to highways and urban roads with full redundancy systems for safety.

Medicare scams cost $54 billion in 2024 as fraudsters target beneficiaries with fake calls demanding payments and personal information to steal benefits.

Scammers create fake Evite invitations that mimic legitimate event emails, requiring users to verify senders and use antivirus software for protection.

The new Apple Watch hypertension feature passively monitors blood pressure patterns over 30 days using sensors to detect chronic high blood pressure signs.

Chrome extension spyware disguised as a free VPN service highlights security risks after it captured private browsing data from trusted sites.

New research shows how fatty acids in cooking oil can safely dissolve and recover silver from circuit boards without harmful chemicals or environmental damage.

The Fox News AI newsletter gives you information on the latest AI technology advancements, and about the challenges and opportunities AI presents now and for the future.

Anthropic investigates alarming AI abuse case where hacker automated entire cybercrime campaign using Claude, stealing sensitive data from defense and healthcare firms.

TikTok, Meta and YouTube restrict Charlie Kirk shooting videos with age gates and warnings while X faces criticism for allowing continued circulation.

Cybercriminals use fake troubleshooting websites to trick Mac users into running terminal commands that install Shamos malware through ClickFix tactics.

San Francisco startup Fable launches Showrunner, an AI platform dubbed the 'Netflix of AI' that generates animated episodes from text descriptions with Amazon support.

Apple raised iPhone prices for some models despite receiving tariff relief from President Donald Trump, with the new lineup starting at $799 for the base model.

A two-story 3D concrete printed home in Western Australia demonstrates faster construction methods that could reshape American housing amid rising costs.

Credit scores remain important during retirement for insurance rates and housing applications, while seniors become prime targets for identity theft and financial scams.

Scammers now send unexpected packages with QR codes that redirect victims to fraudulent websites or download malicious software to steal sensitive information.

Meeting AI tools record private conversations alongside work discussions, creating privacy risks that can be managed with proper settings and awareness.

Hotel privacy concerns are valid but rare, with methods to detect hidden tech using smartphone flashlights, mirror tests and scanning apps.

Improve your Wi-Fi speed and reliability with 10 simple router optimization tips that don't require special apps or expensive subscriptions.

A Columbia University breach exposed names, Social Security numbers and academic records of nearly 869,000 people, with notifications beginning in August.

Rental car drivers use AI-powered apps like Proofr to protect themselves from unfair damage fees as major companies deploy automated inspection tools.

Fox News' AI newsletter brings you the latest on technology advancements around artificial intelligence.

OnTrac data breach between April 13-15, 2025, exposed personal information of over 40,000 people including Social Security numbers and medical records.

A woman named Wika announces her engagement to an AI chatbot sparking worldwide debate about virtual relationships and technology.

The notorious people search site National Public Data relaunches despite a previous breach affecting 3 billion individuals, raising fresh privacy concerns.

Job Costing - Do You Know How?

Small Business