How do you find out which jobs made money?
You give each job its own record in the books and attach every dollar to it as it moves. Income goes against the job it was earned on, and so does every direct cost: materials, labor, subcontractors, equipment and permits. At the end, the job's income minus the job's costs is its margin, and you can put that number next to the estimate you quoted.
Without that, you're guessing. A good month in the bank account can hide a job that lost money, because the deposit from one job and the costs of another land in the same account in the same week.
What has to be tracked against each job?
Five kinds of cost, each recorded at the time it happens rather than reconstructed later.
Materials
Tag each supplier receipt or invoice to the job when you buy, not at month end. A supply house run that covers two jobs gets split between them. Returns go back against the same job the materials came from.
Labor, at its full cost
This is the easiest one to leave off. Every hour worked on a job needs to be recorded against it, from a timesheet that names the job as well as the hours. And the cost of an hour is more than the wage: add the employer payroll taxes and the other costs that come with each hour, such as workers' compensation premium, or every job will look better than it was.
Subcontractors
Each sub's bill goes to the job it was for. If one sub works several jobs in a month, ask for the invoice to be split by job so you don't have to guess.
Equipment and rentals
A rented lift or dumpster belongs to the job it sat on. Equipment you own is harder, and a simple daily rate charged to each job is enough to stop owned equipment from looking free.
Permits, fees and disposal
Small, easy to lose, and they add up across a year. They go on the job too.
Why the bank balance can't answer the question
The bank records money by date. A deposit on a big job, a supply bill for a small one and payroll for both can all clear on the same day. Unless each of those lines is tagged to its job in the books, there is no way to pull them apart later.
Change orders cause the same problem in reverse. Extra work that was agreed on site and billed later has to be recorded as income on the job it was for. Leave it off and the job carries the cost of the extra work with none of the money.
What can your accounting software do?
Accounting software such as QuickBooks lets you attach a customer or job to each transaction and then report on it. Which tools you get, and how far they go on labor costing, depends on the version and plan you're on, so check what yours offers before you build a process around it. The software only reports what gets tagged, though. The habit of tagging every receipt and every timesheet to a job is what makes the report worth reading.
Which of these sounds like your business?
Pick the row that sounds most like your work. Each one changes what counts as a job and what to fix first.
| Your situation | What to track as a job | When to review it | What to fix first |
|---|---|---|---|
| A few big jobs at a time | Each job on its own | Monthly while open, and at close | Cost every line to the job |
| Lots of small service calls | Each type of call | Monthly, by type | Group calls by type |
| A crew moving between jobs each day | Each job on its own | Monthly while open | Daily timesheets by job |
| Books months behind | Nothing yet | After the catch-up | Bring the books current |
A few big jobs at a time
Track every cost to the job and review each one monthly while it runs, then again when it closes. With a handful of jobs, one bad one can take a big share of the year's margin, so it's worth watching them one by one.
Lots of small service calls
Tracking every call as its own job can cost more time than it's worth. Group calls by type instead, such as repairs, installs and maintenance visits, and compare the margin on each type. That tells you which work to chase and which to price up.
A crew that moves between jobs in a day
Labor is where your numbers will go wrong, so fix the timesheet first. Hours recorded by job, every day, beat a weekly total that someone splits from memory on Friday.
Books that are already months behind
Catch up before you trust any job report. A job report built on months nobody has reconciled will show numbers, and the numbers will be wrong. Getting the bookkeeping current comes first, and job costing sits on top of it.
Not sure which of your jobs are paying?
Call (252) 916-3278 or book a free consultation to talk through how your jobs are tracked now.
The report that answers it
Run a profit and loss by job, or by customer if that's how your software labels it, and put the original estimate beside each job. Then sort by margin and look at the bottom three. Ask what they had in common: the same kind of work, the same customer, the same crew, or an estimate that left out a cost. That pattern is what changes your next quote.
Do the same for the top three. The jobs that made the most money tell you what to go after more of.
For contractors around Greenville
We're in Greenville and work with small businesses in Winterville, Ayden, Farmville and the towns around them. Job costing is part of our bookkeeping work, alongside reconciliation and monthly reports.
Office hours are Monday to Friday, 8am to 5pm. Call (252) 916-3278 or get in touch to book a free consultation and talk through how your jobs are tracked today.
