Every dollar counts for a construction company

By Dani Sheehan. 

Unlock the key to business success by pinpointing where money is made or lost in your everyday operations. 

Job costing is a vital accounting method for construction businesses, including those roofing contractors owning small companies. It tracks project expenses in real-time, providing insights into resource allocation, pricing strategies and overall profitability. Implementing a job cost system can feel daunting but breaking it down into manageable phases and utilizing the right technology can simplify the process.  

Why do you need a job costing structure? 

Job costing is a type of accounting that separates costs by individual jobs or projects. These expenses are broken down into several categories, including: 

• Labor: The wages for the crew directly involved in the project. 
• Burden: Additional employee costs, such as benefits or payroll taxes. 
• Materials: All physical items used for the project. 
• Subcontracts: Any work outsourced to other companies. 
• Equipment: Costs of machinery and tools. 

Detailing all costs per project allows you to see how and why expenses are incurred. This insight helps you track job progress, improve estimating and scheduling on future projects, control material and labor use and determine the most profitable areas of business. 

Using construction accounting software for job costing 

Construction accounting software can streamline your job costing process, minimizing human error, ensuring consistent data and allowing for easy adoption into your normal business practices. 

Specifically, a construction accounting solution helps make financial analysis straightforward and accurate. Here are some of the benefits: 

1. Accurate cost tracking: Check out the details of your business’s spending habits. 
2. Transparent spending: Monitor budgets and quickly make spending adjustments. 
3. Improved estimating: Compare actual costs against estimates for future bidding accuracy. 
4. Real-time budget monitoring: Track every dollar spent, allowing you to quickly intervene to prevent budget overruns. 
5. Profitability analysis: Determines the profitability of each job, guiding future project bids. 

How FOUNDATION® improves your construction job costing 

When you own your own business, every dollar counts. Leveraging construction accounting software can help enhance the accuracy and efficiency of job costing, contributing to your overall success and growth. 

One industry-leading software option is FOUNDATION®. With FOUNDATION, you can easily build your own budgets, customize your job cost structure to meet your needs and drill down into costs based on classes, codes and phases. 

Learn more about how to create a structured approach to planning, practicing and effectively adopting a robust job cost system in your business.