Job Costing: Knowing Which Jobs Actually Make Money

What job costing is

Job costing compares what a job brought in against what it actually cost to deliver: labor hours, parts, materials and any subcontractor or equipment cost. The result is the real profit on that job, not the estimate, and not revenue with the costs ignored.

Why it matters more than it seems

Revenue hides a lot. A business can be flat out and still barely profitable because a handful of job types lose money every time and no one has measured it. Job costing turns that into numbers: you can see that a certain kind of work is underpriced, that a crew is slower than assumed, or that material waste is eating the margin. Then you can fix the price or stop taking the work.

Being busy and being profitable are not the same thing, and only job costing tells you which one you are.

Where software fits

For job costing to be accurate, the costs have to be captured as the job happens: technician time logged, parts added to the work order, materials recorded. Field service software that captures all of that can roll it up into a real cost per job with little extra effort. Doing it by hand after the fact is so tedious that most businesses simply don’t, which is why they stay in the dark.

What to look for

Look at whether the software captures labor, parts and materials against each job, whether it reports profit by job, job type and customer, and how much manual work it takes. Commercial and project businesses should treat deep job costing as close to essential, and the commercial platforms like BuildOps and Simpro are built for it, while residential tools such as Jobber offer only partial job costing. Here is how to track job profitability once you have the data.