Find Best Accounting Software for Construction Business | Cloud Accounting Software

 

A vital component to any construction accounting system is job cost—available from good construction accounting software and one that is fully integrated with other fundamental processes.

What is Job Costing?

Job cost in the cloud is a detailed accounting method used to track all facets of a job – labor, materials and overhead. It is also where projects can be tracked by phases and types. 

·  Tracking of labor costs is all-inclusive in job costing and includes rate of pay, worker’s compensation, overtime, company taxes, payroll taxes, employee benefits and other expenses as they might apply. 

·    Materials are generally categorized as direct or indirect. Concrete, steel, wiring, and wood are examples of direct and designated specifically for one job. Indirect are materials are more universal such as tape, fittings, gloves, etc. that can be used for numerous projects.

·     Direct overhead, like direct materials, applies specifically to one job. It tracks expenses such as permits, temporary office space, and rental of specialized equipment. Indirect overhead deals with the traditional expenses involved in running a business such as administrative costs, office expenses and marketing. 

Use and Benefits 

Used to monitor and calculate expenses associated with each individual project from start to finish, job cost in the cloud provides an in-depth view of every aspect related to a specific job. It determines profitability and provides a detailed breakdown of where money is made or lost. You can continually monitor the status of the budget, be aware of any change orders or new expenses, and modify your budget accordingly. 

For example – a job is in progress when workers run into a drywall snafu that requires a significant increase in work hours and materials. Because you have a bird’s-eye-view on the project, you can make necessary modifications in labor and materials resulting in better management of cash flow and profit margin. 

Having this single repository, job cost in the cloud, for all costs related to a job affords the ability to track the progress of each project in real time, 24/7, by using the latest in accounting cloud-based software. As a result, you can address concerns and make changes immediately to prevent cost overrun. You will also gain insight for future jobs by perusing historical reports. 

Having a good job costing system is essential to good construction accounting. It enables sound project management while optimizing profitability.

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