Job-costing is an important phase of management that takes the manager from project leader to accounting manager all in a single day. While the business can take on many jobs, these jobs cost money. Plus, the jobs only pay so much money to complete. Therefore, it is necessary for the manager to determine exactly how much money is being spent on a job and how that job is progressing financially. Simply letting a job’s costs get out of hand can lead to a loss of profits or even a loss of money altogether- on a job that was supposed to earn the company money! Following each of these will help your company begin job-costing- the right way.
Rather than trying to do everything by hand, the manager is wise to use Quickbooks because this software allows for easy editing of spreadsheets and ledgers. While each job is unique, it should also have its own ledger. Moreover, inputting information into that ledger on a daily basis will help the manager to quickly see the progress of the job and how profitable it will be in the end. Without this forecasting tool, managers could begin losing money on a job and never even realize it.
Record Each Job Separately
The manager may have multiple people in the office working on multiple jobs. While this can help to increase productivity, the individual worker’s responsibilities on a single job must be logged to only that job. When the worker is simply paid every week and the manager has no idea how much work they have done, each job could begin to have skewed numbers. In the end, a job could end up costing the company extra cash because worker’s hours are not input to a particular job. Plus, the client who is getting the finished product may want to know what is being done on their job. If the manager cannot show how much work has been done, the client could back out of the deal altogether.
When the manager is checking over the costs of each job they are managing, it is smart for the manager to print reports from Quickbooks that show the ledger for each job. This ledger can be shown to clients, supervisors and workers on the project so that everyone is on the same page. When the whole team has the same information, jobs get done faster and cheaper for everyone.
A business that uses accounting software and is able to stay organized while managing jobs can help managers to keep money in the company’s pocket, while also making certain that a job is finished properly and on-time. The ledgers produced by accounting software programs can help everyone on the job to have the same information, can keep the budget for a job under control and can alert the manager to problems with a certain job.
In the end, job-costing only works when the manager records everything electronically and understands where the money is going and how it is coming back. But when job-costing works, it works very well for businesses. A disorganized business is more often than not a business that is losing money, so start thinking about job-costing today.
Hailey Harper is a marketing strategist and business writer from Tucson, Arizona. She is interested in business tax preparation, marketing, and management.