Guides / Money
Job costing: quoted against actual
Job costing is not bookkeeping. Bookkeeping tells you the job made $1,400. Job costing tells you the walls came in under, the trim took 40 percent longer than you priced, and the same error is sitting in every quote you have sent since.
The comparison has to be by task
A job-level number — quoted 60 hours, took 71 — tells you that something was wrong and nothing about what. It is almost impossible to act on, which is why job-level costing gets abandoned after a few months.
Broken out by task, the same data says: walls 20 quoted and 18 actual, trim 28 quoted and 39 actual, prep 12 quoted and 14 actual. Now you know your trim rate is wrong by a third and you can fix the catalog.
Hours have to come from a clock
Reconstructed hours confirm whatever you already believed. If the number is remembered on Friday, it will come out close to what was quoted, because that is the anchor available to the person remembering.
A clock attached to the job removes the anchor. It does not need to be elaborate — it needs to be recorded while the work is happening and attached to the job rather than to the week.
During the job, not after it
Costing a finished job produces knowledge. Costing a running job produces options: move a crew, reassess the scope, catch the change order you forgot to write, decide to eat it deliberately rather than discover it.
A job trending 30 percent over on day two is a problem with solutions. The same job on the final invoice is just a number.
What to do with the pattern
One job over on trim is noise — a difficult house, a slow day. Six jobs over on trim is your rate, and it is wrong on every quote you send until you change it.
So look across jobs, not at them. The output of job costing is a correction to your production rates, and the value is realized on future estimates rather than on the job you measured.
The job profit calculator runs the single-job version with burden and overhead included.
Also cost the jobs that went well
Companies cost the disasters and skip the good ones, which biases everything they learn. A job that came in 20 percent under was also mispriced, and if you can find out why, it might be work you should be chasing more of.
The goal is not to find out which jobs lost money. It is to find out which kinds of work your pricing is wrong about, in both directions.
Questions
What is job costing?
Comparing what a job was quoted at against what it actually cost — ideally broken out by task, so the comparison tells you which rate was wrong rather than just that something was.
Why not just look at profit per job?
Profit tells you the outcome, not the cause. Quoted-versus-actual by task tells you which production rate to fix, which is the part that affects every future quote.
How do I get accurate actual hours?
From a clock attached to the job, recorded while the work happens. Hours reconstructed later tend to drift toward what was quoted.
Where this stops being arithmetic
Aerys prices a job from your own catalog and production rates, sends it with an accept link and the invoice already attached, and then compares what the job actually cost against what you quoted — by task, while the job is still running.