Job costing tracks expenses for individual jobs or projects rather than averaging costs across multiple jobs or products. This method provides a detailed view of resource allocation, helping your organization evaluate profitability, set accurate pricing, and improve cost control.
Core Components of Job Costing
Direct materials: Raw materials used specifically for a job.
Direct labor: Wages paid to employees directly involved in the job.
Overhead: Indirect costs such as utilities, rent, and administrative expenses allocated to the job.
Job costing is ideal for industries where projects vary significantly, such as construction, manufacturing, and professional services.
Using the Job Costing Feature
The Job Costing feature lets you assign jobs to employees in various roles, apply different rates, and link jobs to projects and clients—enhancing visibility and control over labor costs.
Setup Steps
Complete the initial Job Costing setup according to your company’s needs.
Enable the Job Costing Reporting Hours feature to grant employee access.
Add and configure jobs, including setting different job rates.
(Optional) Add clients.
Add projects and assign jobs and clients as needed.
Employees will be able to clock in and out by selecting a project or job.
Managers should run Job Costing reports to review and analyze job-related data.