Job Costing

Written by Kimberly Clark
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Any company that provides potential customers with an estimate that approximates what a project might cost, prior to actually performing the work, would no doubt benefit from using an efficient job costing product in its office. In fact, for these types of businesses, the bidding process is probably their most critical task. Miscalculating the anticipated price of a job could negatively impact the company's bottom line and what's worse, it could result in some uncompensated out of pocket expenses for the business owner.

Selecting Job Costing Software

When selecting job costing software, it is highly recommended that the business owner look for one that has the ability to track the status of the entire project. It should start with the customer's initial inquiry and continue right down to the issuance of the final invoice. In addition, the software should be flexible enough to effortlessly allow the user to make any necessary project modifications.

These changes could be a result of uncontrollable events like increases in material price, or they might be due to discrepancies in the estimators' projection and the actual number of parts the job will require. Flawed estimates on such things as the total cost of labor or the time it will take to complete the project are other factors that could contribute to costly underbidding. Whatever the case, for each particular job, a job costing product should allow the user to track the actual costs of all the materials and labor used.

The job costing software's ability to track this type of information makes it an invaluable tool. This feature, coupled with reporting and trend generation capabilities, allows the user to develop better job forecasting guidelines. This, in turn, will hopefully help them to avoid making the same expensive mistakes in the future.

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