Posts in Job Costing
5 Tips for Improving Your Job Costing


How confident are you in your job cost numbers? Tracking and controlling job costs is essential to running a profitable construction company. Unfortunately, many construction firm owners don't have a high degree of confidence in their job costing numbers. Here are 5 tips to help increase your confidence in your job cost numbers.

1. Track Committed Costs

Have you ever closed out a job then received a bill you’d completely forgotten about? Suddenly the profit you thought you’d made erodes before your eyes. Sage construction software helps you issue and track purchase orders and subcontracts to give you the clearest picture of every cost connected to a job.

2. Install a Change Order Process

Understanding how and why your budget has changed is critical to establishing your true job costs. Documenting and monitoring the status of change orders will help make sure you get paid for all your work.

3. Collect Time Sheet Data Daily

Labor is your biggest risk to losing money on your jobs. Capturing and reporting work time on a daily basis (rather than weekly) will improve time sheet accuracy. It will also give you a more current view of labor costs. We can help with integration to mobile time card reporting applications.

4. Use Alerts

Sage construction software lets you take proactive measures to monitor your costs. You can set up automatic alerts to notify you when jobs haven’t been billed, profit falls below a specified percent, as well as any another event that you want to be notified about.

5. Give Estimators Access to Actual Costs

Tracking actual costs against your budget and using that information to refine future bids will improve your company’s ability to win more profitable work.

Use these tips to get the most out of the job cost features of your Sage construction software. If you don't use Sage construction software and would like to learn more, feel free to contact us. You may also want to check out our free Software Selection Guide.

Quick Cash Flow Analysis for Construction Companies

Cash flow is the lifeblood of your construction business. Watch this video to learn how you can quickly get the information you need to stay on top of your cash flow with Sage 300 Construction & Real Estate Excel-Based Reporting. 


Healthy cash flow is like oxygen to a company, and staying on top of changes to your cash flow trend can help you make corrections before trends turn into problems. With a Sage 300 Construction and Real Estate Excel based report, we can get a big picture view of the overall cash flow trend from jobs over the past 12 months. The overall trend is made up of the individual contributions from each job month to month. Trends in the cash flow for individual jobs or groups of jobs may identify billing issues, collection issues, or spending issues that with little analysis can be identified and addressed. This provides us with a 12 month window showing how our jobs have been affecting the company's cash flow each month. By filtering the data a little further, we can see the same trend analysis for a specific job, a specific customer, or a specific project manager.

Identifying the specific causes for increases or decreases requires quick access to live data. Sage 300 Construction and Real Estate Excel based reporting enables us to drill down into a specific value to see the supporting information. The amount by which the job increased or decreased cash is broken down by types of cash receipts and disbursements. By observing cash receipts we can quickly confirm that payments are being received from the customer on a timely basis. By drilling into disbursements we can review the usage of company credit cards or burden incurred from payroll. Ultimately, a review of this information may help in decision making processes pertaining to things like billing processes, payment collection, usage of company credit cards, costs not associated with sub-contracts or purchase orders, or the use of overtime.

For more information about cash flow analysis using Sage 300 Construction and Real Estate, contact us by phone or email, or  learn more about Sage 300 Construction and Real Estate on our website.

5 Questions To Ask Before Buying Job Costing Software

questionSuccessful contractors understand that job costing can mean the difference between a profitable business and one that struggles. But installing a job costing system isn’t a silver bullet; it takes planning and work to see the benefits from job costing. Here are 5 questions you should ask before buying (or upgrading) your job costing software.

1. What Information is Needed?

As Steven Covey says, you want to “Begin with the end in mind”. It is important to determine the specific needs of your business. In order to get useful reports out of a job costing system, you have to collect and enter the data you need for those reports. Companies that don’t take the time to define their needs often:

  • Struggle to make a decision about which job costing system to purchase because they are overwhelmed with all of the available features. Some of them end up making decisions based on the favorite bells and whistles of the salesperson even though they don’t end up using those features.
  • Waste a lot of time collecting data they never need
  • Don’t set up the system to collect the information they need to make informed decisions about their jobs..

2. Who Needs Job Cost Information?

You will also want to determine who needs what information to do their job. While initially it may be quicker to create one master report that has the information that everyone needs, having reports that are tailored to deliver the information needed by different management roles (i.e. job foreman, supervisor, C.F.O., C.E.O, etc.) will make it easier to find the actionable data needed to make better decisions.

Don’t forget to consider the reporting needs for individuals outside of your company, like you banker or your bonding agent.

3. How Will Labor be Coded for Job Costing

Since labor is a large component of the overall cost of a job, one of the first issues you need to address is how that labor will be coded to the particular job and/or category. For example, will timecards come in from the field with correct job costing information? If so, who will code them – will the foreman code all of them or will each person code their own? Will your time keeping system need to be updated to handle job costing? If they will not be coded in the field, who will code the timecards (and when)?

Try to add job costing information to the time keeping records as quickly as possible. The longer the delay, the greater chance for error and the greater chance your people are making decisions with incomplete data.

4. Is There a Standard Budgeting Process for All Jobs?

Do you create budgets/estimates for all of your jobs? Many construction companies set up their job cost tracking system to mirror the budgeting system in order to easily compare budgeted vs. actual costs. If you don’t create budgets for all of your jobs, which costs will you track for those jobs? If your job cost tracking categories do not match your budgeting categories, how will make sure that all costs are being reported and nothing is falling through the cracks?

5. Do You have a Standard Process for Material Requisition and Purchase?

Just like labor, it is important to make sure you are recording and coding all material purchases to the correct jobs. Before you implement  a job costing system (or as part of that process), you should have processes and procedures in place for requisitioning and purchasing materials. In addition to defining who can approve material purchases you will also want to define who has the authority/responsibility for coding accounts payable invoices and when they should be coded.

There are many other questions to consider, but these should give you a good start. If you have any questions or need help evaluating your needs, contact us for a free consultation.

Job Cost Reporting - Can You Answer These 10 Questions

job cost reportingDo you feel like you are forced to make critical business decisions with incomplete information? Many construction company owners don't feel 100% confidence in their day-to-day decisions because they lack visibility into the key performance metrics driving their business. This is particularly true when it comes to job cost and job profitability data. Accurately recording the costs associated with each job is essential, but being able to quickly retrieve that information and using it to make informed decisions is equally important.

This is where tracking job cost information in spreadsheets often falls down. Some companies spend so much time creating and reconciling spreadsheets that they miss out on opportunities. Even worse, they may miss early warning signs that a particular job is in trouble and needs attention.

Is your job cost system helping you make money or is? Use the questions below to evaluate whether you can (and how quickly) retrieve important decision making information from your system:

  1. How do my budgeted costs compare to my actual costs?
  2. What are my costs for a particular job phase or cost code?
  3. What is my labor productivity, including labor's effect on total job costs?
  4. What are my overbillings vs underbillings?
  5. What are my committed costs?
  6. What was my margin variance on a particular project?
  7. Did I have schedule variances and what caused them?
  8. What does it cost to have each piece of equipment on a project for one day?
  9. How are change orders impacting my project cost?
  10. How many safety issues have there been on a particular project?

If you are not using construction specific software, you may have trouble answering the questions above in a timely manner. If you do have construction specific software and you still have trouble answering these questions, you may just need to set up a better reporting and/or dashboard system to help you access the information you need, when you need it.

Want to learn more about construction specific software solutions?

Request a free copy of Finding the Right Fit – A Guide to Selecting the Right Software Solution for Your Construction Company


Job CostingJon NewsomComment