If a service business’s financial, time tracking and payroll systems aren’t integrated, it’s likely they have time and expense leakage that are going unnoticed and un-billed. When project-based businesses lose sight of project management, travel time and other non-billable time, it’s not uncommon for them to go for months without knowing they are under water on a job or project.
And, by the time the missed expenses are discovered, it’s too late to return to the client with an adjusted fee.
The only way that job costing works is to know that nothing is slipping through the cracks.
While many well-run businesses rely on “standard rates” from their project management system to gauge profitability, the best run businesses use their accounting system to track all labor and direct expenses incurred to deliver services to see a true reflection of their gross profit.
True job costing goes beyond just tracking salaried time to include health insurance, travel time, and even costs related to recruiting and training your people. While the initial effort in designing the financial system is greater, once you have a fully burdened labor cost allocation, you can track profitability by customer, job, service item, product line, or whatever way your company and organizational chart are structured. This allows businesses to monitor, and manage, every expense that goes into conducting business.
Get decision-ready financial information
Your Accounting Team helps businesses achieve accurate job costing by fully integrating their accounting, time tracking and expense management systems. We work with any time tracking system that integrates with QuickBooks. We make it really easy for your staff to track the time they spend on every job, customer, product or service, and we automatically feed that information into your accounting system. Once it’s in your accounting system, we use that timesheet information for billing purposes, to generate payroll, and to automatically allocate your labor costs based on the timesheets and direct expenses.
With customized job costing reports, you can make data driven decisions for your business’s biggest questions:
- Are we running jobs on budget?
- Who are the most profitable and least profitable clients?
- Do we have operational inefficiencies?
- Which clients do we need to re-price? Or fire?
- Who are the most productive people, employees, teams, and departments?
- When is the right time to hire more staff?
- Are we within our target margins?
- Where should I invest my marketing dollars?