Job costing is a method of accounting used to track all the costs associated with a specific construction job or project.
This method involves breaking down expenses into cost categories and tracking the cost codes of each category separately. This enables contractors to identify areas where they may be spending too much money, as well as areas where they are able to save money, enabling them to increase their profitability and run their businesses more efficiently.
The details tracked within job costing will usually include labor costs, materials costs, subcontractor fees, and overhead expenses. Job costing also allows for better management of changes that occur during the course of a project as additional expenses can be easily identified and tracked. As an added benefit, job costing can provide an accurate picture of the financial health of a project at any given time by providing an up-to-date snapshot of what has been spent on a particular job or project versus budgeted amounts. This information can then be used to make informed decisions on how to proceed with future projects or jobs.
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