Job costing construction: every hour and invoice posted to the job that used it
- Work order total
- $863.16
- Labour
- $510
- Parts, marked up
- $288
Every figure on this page is computed from the inputs entered, by the method stated below it. Jobcardo publishes no tax rate, no wage figure and no trade standard: the rate, the markup and the tax on the parts line are yours, and the defaults are a worked example to replace with your own figures.
Job costing is the discipline of posting every hour, every invoice and every piece of plant to the job that consumed it, so that at any point you can say what this job has cost and what it was priced at. On a construction job it is harder than it sounds for one reason: labour. Material invoices arrive with a delivery note that names the site, and hours arrive as a number on a timesheet that has to be split across three jobs by somebody who was not there.
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Cost the hour properly: construction labor costs at the burdened rate
The burdened rate is the wage plus payroll taxes, insurance, holiday and non-productive time, and it is what a job actually pays for an hour of work. Job costing built on the bare wage understates every job by roughly the same margin, which is the most consistent way a busy construction firm loses money while its estimates look right.
Post everything to the job on the day it happens
Hours to the job and the operation; supplier invoices split across jobs when they arrive, not at month end; plant by the day it was on site. Construction job cost reporting is only as current as the last posting, and a fortnight of unposted costs is a fortnight where the number you are reading is the number from before the problem started.
Compare to the estimate's own lines, not to the total
The useful comparison is element by element: what did the framing cost against what the framing was priced at. A single total tells you whether the job made money after it is too late; the element comparison tells you which trade is running over while there is still a sequence to change.
Job costing construction: common questions
How do I calculate labor cost in construction? Take the hours on the job and multiply by the burdened hourly rate rather than the wage. The burden is the employer's payroll taxes, insurance, paid leave and any non-productive time you carry, expressed per productive hour. Add supervision if it is charged to the job rather than to overhead.
What is the difference between job costing and estimating? The estimate is what you thought before the work; job costing is what happened. They only become useful together, because an estimate that is never compared to the outcome cannot improve, and costs with nothing to compare them to are just bookkeeping.
How often should a small builder review job costs? Weekly on an active job. The purpose is a decision while decisions are still possible, and a monthly review on a ten week job gives you two opportunities to act, both of them late.
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