The Secret of Successful Job Costing

There are many reasons why job costing may fail, but following a few simple rules can help improve the reliability of your job cost reports.

  1. Keep it relevant

    Decide what information you want to get out of the process, if you are not going to use the information there is no point in entering it. For example, if for the majority of the time the only job costing you need is to see a simple breakdown of a dozen or so categories, e.g. materials, labour, subcontractor, plant, etc. or by build phase; there is no reason to spend more time entering more information.

    However, if you do need more detailed information; such as the amount of materials against each build phase or plot, rather than on a job as a whole, but when entering the job costing it hasn’t been allocated in that way; the reporting is going to be too simplistic to help.

    Work out the level of detail your job needs and stick to it.


  2. Keep Up to Date

    Nothing destroys confidence more quickly than finding out the reports you are looking at do not contain half the information you need; either because they are not updated in a timely manner or something has been missed along the way.

    When using generic accounts systems and spreadsheets you have to re-enter information multiple times. This can easily lead to confusion as to what information has been entered and where. During busy periods double checking every entry is both time consuming and means data is likely to be missed.

    Work with a simple system that enables ease and speed of updating your data so you don’t get bogged down.


  3. Accuracy

    Another problem with entering information in multiple places is the increased risk of errors; it is very simple to transpose digits or misplace a decimal point. If this is noticed later it will erode confidence in the reports; even worse, if it is not noticed at all and you are relying on faulty information.

    Ensure that you, and those customers you are billing, can trust the data in your reports.


  4. Knowing the costs, but not what it means

    Ok, so you know exactly what is being spent on each area of the job, and for some people this is all that is needed; but is the fact you spent £350,000 on “X” good or bad?

    Setting budgets against a job, and being able to compare to actual spends, tells you exactly where you are making and losing money.


  5. What about all those variations?

    Keeping track of variations and the cost attributable to them is essential, especially if any extras need to be recharged to your customers.

    Make sure you set up the appropriate cost codes and levels of detail required for each job.


CLiP IT Solutions provide specialised accounts software for the Construction Industry. Construction is unique in many of its requirements, specifically in the areas of job costing, the construction industry scheme (CIS), applications (stage payments) and retentions. Job costing is the single biggest reason people choose our CIA (construction industry accounts) software.

CIA has the ability to break job costs into as many or few fields as is necessary. Each job can be unique, or you can create templates to enable jobs to be set up quickly and easily exactly as you need them.

Clients often tell us that during busy periods the first thing to be sacrificed is extra data entry. CIA is designed so that one entry updates everything, meaning your accounts and job costing get updated immediately.

Saving time, ensuring accuracy of their data and being able to see where profits are being made, or are at risk, are all key benefits from using a specialised construction accounting package like CIA.

Find out more about the solutions that can most benefit your business by contacting the CLiP IT team.