Watch a 4-minute tutorial about job costing
Job cost tracking is an extremely important part of a contractor's
business. Job costing means tracking the expenses for a job and then comparing
those expenses to the job's revenue. This tells you which jobs are making
money and which are not.
With the QuickBooks job costing tools you can easily see exactly how much
money you spent—and made—on each of your jobs. You won't have
to wait until you do your taxes at the end of the year to see how your business
is doing. Plus, you'll be able to see which types of jobs are winners and
which are losers, so you'll know which jobs to take in the future.
Job costing in QuickBooks can also help you estimate more accurately.
Estimating may be the most important—and most difficult—part of
running a contractor business. But unless you compare your estimated costs to
your actual costs after the work is complete, you have no way to know if you
are estimating too high or low, and no way of improving your ability to
estimate in the future. The QuickBooks job cost reports make it easy for you to
compare your estimated costs to actual costs.
Job costing in QuickBooks Contractor Edition is easy. You are probably
already entering most, if not all, of the information you need into QuickBooks.
If you follow a few simple steps, full job cost reports will be at your
fingertips whenever you need them.
Set up a Customer:Job
for each of your jobs.
Even if you have only one job for a particular customer, it's a good
idea to set up an individual job for that customer. This allows you to keep
track of your income and expenses on a job-by-job basis, and it can simplify
your bookkeeping if you add another job for that customer in the future.
Set up your items to optimize
for job costing.
The level of detail in your Item list determines the level of detail in your
job cost reports.
Assign all your expenses
To get a complete job cost picture, make sure to assign all your expenses to
jobs. QuickBooks makes this easy—simply make sure you select the
appropriate job in the Customer:Job column whenever you enter a bill, check, or
timesheet. Overhead expenses that aren't specific to a job can be assigned
to a "dummy" job, as described in the link above.
You can use the Expenses
Not Assigned to Jobs report to check that you haven't missed any expenses.
Enter your estimates in
The link above outlines different strategies to do this. You can create your
estimates directly in QuickBooks. If you prefer to create estimates with a
spreadsheet or outside program, you can just bring summary estimates into
QuickBooks. Finally, if you create estimates outside of QuickBooks, but you
create invoices in QuickBooks, you can simply enter your invoice information in
the Create Estimates window and then automatically turn your estimates into
You can use some job costing reports without QuickBooks estimates. However,
if you enter estimates in QuickBooks, you'll be able to use the full range
of QuickBooks job cost reports to make sure your project budget is on track and
to evaluate how accurate the estimates are and adjust them appropriately for
future projects. Estimating more accurately can in turn help you make more
money from each job and win more jobs in the future.
Create invoices in QuickBooks and
choose the right Customer:Job on the invoice form.
If you create your invoices outside of QuickBooks, enter at least a summary
of each invoice into QuickBooks so the revenue is included in the job
Use the QuickBooks job cost reports
to learn how your business is doing on a job-by-job basis.
Use the QuickBooks Job Costing
Center to see a summary of some of your most important job costing data,
including your 3 most and 3 least profitable jobs, plus links to job costing
Go to the Contractor menu and click Job Costing Center.
Adding a job
labor burden in job cost reports