Many would consider this to be one of the most important parts of planning a Job.
If you do this correctly you will make money and if you do it wrong you may lose a lot of money.
Job Costing allows you to see which clients, projects, employees and services are most profitable.
Simply, Job Costing involves allocating material cost, labor and overhead to an individual job.
Whether you are designing a software program, constructing a house, or manufacturing a widget job costing involves:
Materials- Assign materials to a specific job
Labor-Assigning employees to a specific job
Overhead- Allocation of General & Administrative (Non-Direct) Expenses to a Specific Job. This could be done by revenue %, time %, fixed %, and so on.
If you are successful at allocating costs (material, labor & overhead) you will be able to see if you are making money on individual projects and decide what type of work to pursue in the future.
The process of job costing is straight-forward. Categorize all of your expenses, allocate them to different buckets compare the costs to revenue and see if you are making money.
The issue is that the above is tedious, time consuming, labor intensive and to be candid boring and mundane.
EWBiz Service recommends using https://www.knowify.com/ which has powerful job costing tools, you can plan your jobs and itemize your labor and material budgets to create comprehensive cost estimates. These estimates can be translated into a bid with a single click. Then, you can track materials, labor, subs, and equipment against budgets.
When setting up this program it is important to partner with an expert such as EWBizservice.com which are Knowify Certified Advisors.
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