Job costing
Job costing is tracking what a single job actually cost to deliver, in labour, materials, subcontractors and a share of overhead, so the real profit on that job can be compared with the price quoted. It answers one question: did this job make money?
In practice for trades
Most trade businesses know whether the year was good. Far fewer know which jobs paid and which quietly funded themselves out of the others. Job costing is what turns that from a feeling into a number.
Four costs go against every job. Labour at its true cost rather than the wage, materials at what was actually bought including the bits nobody logged, any subcontractor invoices, and a share of overhead recovered per hour worked. Leave out overhead and every job looks profitable while the business does not.
The value is in the comparison. A job that came in at cost is not a disaster on its own, but three in a row on the same type of work means the estimating is wrong, and that is a pricing fix rather than a bad-luck story.
Cost jobs while they are live. Hours logged a fortnight later are guesses, and by year end the quote that caused the problem has been reused twenty times.
Worked example
You quoted £4,200 for a rewire. Actual: labour 46 hours at £35 = £1,610, materials £1,240, a subcontractor's invoice £450, and overhead recovery at £12 an hour = £552. Total cost £3,852. Profit is £348, a 8.3% margin against the 20% the quote assumed. The job did not lose money, but it earned less than half what it was priced to earn.
Related terms
- Charge-out rate: the rate labour is costed and billed at
- Preliminaries: the job-wide costs that also have to land somewhere
- Day rate: pricing by the day, then checking it held
Work it out in FieldHive
Compare quoted against actual on any job with the Estimated vs Actual Job Profit Calculator.
Estimated vs Actual Job Profit Calculator→
