Job Costing: Tracking Cost to Each Job

Job costing assigns every dollar of cost to a specific job (and often a cost code within it). It's the heart of construction accounting.

What you track per job

• Labor (with burden — taxes, benefits, comp)
• Materials
• Equipment
• Subcontractors
• Other (permits, rentals)

Why it matters

• Estimate vs. actual — compare what you bid to what it's costing, in real time, so you catch overruns early.
• Profitability — you learn which job types and which crews actually make money.
• Better bidding — historical job-cost data sharpens future estimates.

Cost codes

Break each job into codes (e.g., concrete, framing, electrical) so you can see exactly where money goes. The discipline of coding every invoice and timecard is what makes the data useful.

Going Deeper (Intermediate)

Job costing tags every dollar to a job + cost code (CSI division or your own codes) and cost type (LMESO). It answers the only question that matters: is this job making money? — which the bank balance never tells you.

The workflow: estimate → budget by cost code → track actuals → compare. Variances flagged early are fixable; found at closeout they're just losses you already took.

Advanced / Pro-Level

Pro job costing is forward-looking:

• Committed cost (signed subcontracts + POs) + cost-to-complete = projected final cost (EAC); compare to the estimate for projected over/under before the money is spent.
• Earned-value check: compare % of budget spent to % physically complete. Spent 60% of labor budget but only 40% built = you're trending over on labor — act now.
• Feed actual unit costs back into your estimating database so the next bid is sharper. Job costing and estimating are a closed loop; contractors who skip it bid blind.

Practice Challenge

Framing labor was budgeted $80k. You've spent $60k and the super says it's ~50% done. What's the projected final cost and the problem? (Answer: $60k ÷ 0.50 = $120k projected vs. $80k budget — a $40k overrun trending now; investigate productivity/scope immediately, don't wait for closeout.)

In Practice

Two similar jobs — one made money, one lost. Without job costing you'd never know which, or why. Coding every invoice and timecard to the job is what reveals it.

Common Mistakes to Avoid

• Not coding costs to a specific job
• Forgetting labor burden (taxes, comp, benefits)
• Not comparing estimate vs. actual

Takeaway: Code every invoice and timecard to a job; that data sharpens every future bid.

Educational content — not legal, accounting, or licensing advice. Rules vary by state and change; verify with the licensing board and a CPA.