Job Costing

What is job costing?

Job costing assigns every direct cost (labor, materials, subs, equipment) and a fair share of overhead to a specific project. It answers the question owners never ask out loud: "Did we actually make money on that job?"

Without job costing, a busy schedule can hide losing jobs until cash flow breaks.

Job costing vs company P&L

Review job costs weekly on active projects, not once at year-end.

What to track per job

• Labor hours and burden by phase
• Materials and POs tied to the job
• Subcontractor invoices
• Equipment rentals and disposal
• Change orders (approved vs pending)
• Retainage held and receivable

Tag expenses at purchase, not during panic at closeout.

Job costing and estimating feedback

Compare estimated vs actual hours and materials after each job. Patterns show where your price book is stale:

• Underestimated demo on remodels
• Extra trips on service calls
• Change order leakage

Feed those lessons into the next bid.

Tools and habits

Even a spreadsheet beats guessing if you use it consistently. Contractor software helps when it connects estimates, time, receipts, and invoices to the same job record.

On the job

Close job costs within 30 days of completion. Memory fades.

Separate change order buckets. Do not bury extra work in original scope codes.

Watch committed costs (POs not yet invoiced) on long jobs.

Job costing is how you learn from the field without repeating the same margin mistakes on the next contract.