Hello! This week we’re bringing you a throwback from one of our editions of Free Friday!
This month we’ve been discussing job costing. We’ve even provided you with a free download of a Basic Job Costing Sheet.
So, what is job costing?
Job Costing involves the accumulation of the costs of materials, labour and other expenses job for a particular job. This approach is an excellent tool for tracing specific costs to individual jobs and examining them to see if the costs can be reduced in future jobs. If applicable, it can also be used to track additional unforeseen costs which can then be billed on to a customer.
Why is job costing so important?
Do you remember why you started your business? In truth, there may have been several reasons but we can guarantee that one of the reasons was to make money, pay your way, support your family? Job costing is about looking after those pennies to ensure you are getting the most out of each job and achieving what you set out to do – make money.
Don’t let your hard earned money slip away. Job costing is easy and common sense but often gets forgotten. Some jobs (or products, or classes, or services, or projects) that you thought were making money didn’t make as much. Other jobs may have been more profitable than you estimated. And many probably came in line with what you expected. But how will you know if you don’t check??
Free Job Costing Template
Our basic Job Costing spreadsheet is ideal for new start ups and small businesses as it will help you make a start at tracking that gross profit. This spreadsheet will not factor in your daily overheads and operating costs; it simply tracks the job revenue against its direct costs. This is an excellent way of tracking your profit margins and keeping things tight. For larger businesses, we recommend making an apportionment calculation of overheads to take job costing that one step further – if you need help on how to do this get in touch!
It’s not a perfect science. The numbers probably aren’t always going to be exact – some time incurred costs may be mis-charged. Some of the overhead expenses or hours may have changed a bit. But it’s going to be pretty close. And it’s also not a six-figure job costing system that some consultants would recommend, but you’re going to find it pretty interesting and it will keep you on task.
Would you like some support with your job costing? Or perhaps looking to change your Bookkeeper and make the switch to Xero? Get in touch to have a chat about your requirements. Telephone 01858 289189 or email us at firstname.lastname@example.org
Happy job costing!