Job costing
Job costing is tracking the actual costs of a specific job — materials, labor, subs, and other expenses — against what you estimated, so you know the real profit on that job.
Job costing assigns every cost to the job that incurred it, then compares those actuals to the job's estimate or budget. Done in real time, it tells a contractor whether a job is making or losing money while there's still time to act — rather than after the books close. It's the foundation of knowing your true profit per job, not just per year.
See also: Free job profit calculator
Related terms
- Cost codes — Cost codes are standardized buckets (e.g. materials, labor, subs, equipment — often by phase) used to categorize every job cost so you can compare actuals to the estimate.
- Estimate vs. actual — Estimate vs. actual compares what you bid for each part of a job to what it actually cost, revealing where your estimating was off.
- Work in progress (WIP) — A WIP report shows, across all open jobs, how much has been earned vs. billed — surfacing overbilling and underbilling and your real position.
- Gross profit — Gross profit is revenue minus the direct cost of the work (materials, labor, subs) — before overhead and other business expenses.