In these tight conditions – you know, the new ‘GFC’ market-place we’re all adapting to after 3 years – costing any job to ensure you simply don’t lose money is the new ‘success’. It’s a fact that businesses with no effective job costing system complain of being overwhelmed by manual processing, yards of paperwork and not having one central location to track jobs & resources. This creates an inability to effectively cost jobs, plan resources, and track equipment, materials & inventory used. Once job costs are lost, it’s very hard to get back on track.
What is demanded is a way to accurately manage the profitability of jobs and projects in real time by somehow getting direct visibility of all of inputs from start to finish.
It should all start with well-informed estimating, setting the job budget(s), then quoting using well qualified costing techniques. Once the job is awarded, the key discipline is to manage the budget. When it's time to invoice, businesses need to easily identify any variances and charge appropriately – straight away.
All of this is a rather complex process that is repeated daily by jobbing businesses, and it’s the constant improvements that can be made to this costing and managing of the jobs that will be the difference between improving and making healthy margins, or losing the game altogether.
Job costing software dramatically improves the managing of jobs, but in particular the accurate cost management in fine detail – per job, current and historical. Be they labour or materials, you must be pricing with the latest data and the wisdom you gain through accurate analysis of past jobs.
Good job costing software provides this valuable management and insight.
Being able to report on every job, showing your finished profit margin (negative or positive), is the beginning of driving your business upwards and into rich profits. If you’re not achieving this now, you should take a look at some possibilities. Here’s one to start with: EXO Job Costing, a great option for the serious operator. You can take a look at EXO Job Costing via a free webinar – click this link to see more.
Grant Harwood is a director of Auckland-based software consultancy GlobalBizpro – and writes on the various business pains that can be solved with better software.