Job Costing is the revenue that you take in when you perform a job is only one half of the information you need in determining whether or not you really made any money on the job. In order to do the job you have to pay your technicians and buy the materials they use on the job. When you compare that cost of performing the job to the amount of money you charged for it you can determine whether or not the job was profitable.
In order to allow you to determine the cost of performing work, Pointman allows you to:
1. Add cost to the items in your Pricebook
Items in your Pricebook contain a field that allows you to enter the cost of that item. For a part item, the cost would be the amount you generally pay for that part. When adding cost to a Task item you will enter the expected total of the parts and materials needed for the job in the Material cost field of the task item. When that part or task item is included in a sold proposal, the cost of that item will be added to the total job cost. The material cost can be modified individually at the proposal level to account for cost changes.
2. Identify an hourly labor rate for your employees
In order to determine the cost of the labor your technicians provide on the job, there is a field in the Employee Setup for each employee that allows you to identify their hourly rate. When entering this rate for each employee you can choose to identify the regular rate the employee earns per hour, or if you know the technician’s “burdened rate” you can use that instead. Burdened rate is the cost per hour of the technician after you included additional costs you pay beyond their pay for things such as Federal and State payroll taxes, Social Security, workers comp, benefits and other employee related expenses. You can work with your accountant to identify this number. Adding it to the employees paid rate gives you a more accurate picture of your profitability.
For each job the total time techs worked on the job, both driving and actually onsite performing visits, is multiplied by their hourly rate to give you the total labor cost on the job.
This labor cost and the material cost of the accepted proposal items together provide the total job cost.
Once a job is completed and the invoice finalized, the total of the material and labor cost as well as the sale amount of the job will appear on the job detail screen.
The Job Scorecard Report will also show job costing and job profit information at a per job level as well as provide you with totals across all jobs in the report. The report will also identify your cost of labor as well your cost of materials as a percentage of total sales. These are important numbers to have available in determining whether your labor costs and part costs are in line with expectations.