Job Costing

Job Management Overview

The Jobs module of EBMS is used to analyze individual construction, manufacturing, or other types of jobs. This powerful tool is used by a manager that makes decisions based on the profitability of individual projects or jobs. Actual costs are compared to budgeted or estimated costs. These costs may include cost of materials, payroll costs, subcontractor billings, and miscellaneous costs. A job can be divided into stages so the user can properly analyze a portion of the job. For example, a building contractor may create a job for each building or project. The project may be divided into stages such as site work, foundation, framing, roof, electrical, plumbing, finishing, etc. The contractor may associate a job with the costs within a PO or vendor invoice as well as associate a job or jobs within an employee's timecard to allocate labor expenses.

Each job contains a variety of job related information such as contact information, dates, status settings, site information and type of job. Each job may contain one or many different stages. Each stage contains budget totals, actual costs, committed costs, and overhead costs. Job retainage may be calculated and processed for each sales invoice as well as recording vendor retainage for the user's subcontractors. The EBMS Job Costing module allows custom tailored information to meet the needs of a building contractor or a manufacturing company.

Scenario:  A mechanical contractor provides the HVAC and plumbing solution for new commercial buildings.  The project is estimated based on the design, rough in, plumbing, building equipment, and finishing costs.  A bill of materials is created to identify the materials needed.  Equipment bids are requested from various vendors.  The billing for the project is based on the progress of the job.  Changes made after the contract is approved are managed as separate change orders.  The success of the project is measured based on the satisfaction of the customer, meeting schedules, and the management of labor and material costs compared to the project budget.

Scenario:  A metal building supply company includes a construction division within the company.  This division builds custom designed agriculture buildings based on the needs of the customer.  The estimate, quote, and budget consists of multiple stages to give the user the ability to evaluate different segments of the building.  The materials, labor, subcontracts, and design costs are budgeted and managed within EBMS.  Progress billing is used to invoice the contract and change orders on a monthly basis.  Work in process financial transactions are posted monthly to maintain an accurate profit and loss statement even though building projects can last for months.   The snapshot summary of the progress and profit of individual jobs is important for this growing company.

Scenario:  A specialty equipment company designs, sells, manufactures, and installs a complete processing solution.  The equipment is configured to meet the customer’s specific needs and budget.  The proposal is created within EBMS using various kits, assemblies, and services.   The user will often take a previous project and modify the proposal to create a bill of materials (BOM) and a budget for the new project.  The solution is grouped using job stages and labor tasks to evaluate different segments of the solution.  The equipment, labor, subcontract, and material costs are all managed within EBMS.  Recurring billing is used to invoice the solution on a monthly basis.  The ability to compare costs with the budget and revenue of each segment is an important management tool for this company.

Job cost Webinar

Job cost ERP Support Training

Job Billings ERP Support Training

Job Management and Reporting ERP Support Training

Types of Jobs

The job costing module of EBMS can be used for a variety of applications including some examples below:

Construction:  Construction projects may include general contracting, mechanical, subcontracting, or specialty construction.

  1. Contract projects: Contract jobs may include T&M change orders and A.I.A. (American Institute of Architects) billings. Review the Contract Billing and Progress Billing sections of this manual for more details.

  2. T&M projects: An entire job, change order, or a small project can be managed in a time and material (T&M) basis. Review the Time and Materials section for more details.

Manufacturing:

  1. Made to order projects: Made to order jobs should be created using the contract job type. Follow the Job and Job Cost sections of this manual. These jobs are configured in a similar method as the contract construction jobs.

  2. Time & Materials projects: An entire job, change order, or a small project can be managed in a time and material (T&M) basis. The Job Type setting of a T&M manufacturing job should be set as Time and Materials rather than manufacturing. Review the Time and Material Jobs section for more details.

  3. Stock products: The job costing module of EBMS can be used to track the costs of a manufacturing batch of stock products. A job may consist of a single batch or an entire line of products for a specified period of time. Review the Jobs > Stock Manufacturing Jobs section for more details on using job costing for stock inventory manufacturing jobs.

Service Contracts:

  1. Manage Service Contracts by tracking work associated with the contract.

  2. Track labor and/or arts and expenses based on a service contract.

  3. Bill service contracts on a monthly, quarterly, or annual basis using recurring billing attached to each job.  Review Contract Billings > Recurring Billings for instructions to bill and manage service contracts.

Equipment Cost Tracking:

  1. The job costing module can be used to track the expenses incurred for a specific piece of equipment. Labor, parts (inventory), and other expenses can be posted to an equipment job. The user can ignore the budget, billing, and work in process sections of this manual if job costing is used solely for equipment cost tracking.

Job Organization

Job entry will be greatly simplified if the job classifications, stages, folders, and defaults are properly organized. Review the following Classifications, Jobs > Entering Job Stages, Adding and Deleting Job Folders, and Setting Job Defaults sections before creating new jobs.

Job Categories

A company can use one or more of the job applications described above within the same company. Separate job folders should be created to separate the varied applications. Review the Getting Started > Adding and Deleting Job Folders section to create job groups or folders.

Job Stages

Jobs can be evaluated by a few user defined stages such as labor, materials, rentals or can be configured to use the common construction cost codes that may involve hundreds of codes. Review the Stages section for more details on setting up a master stage list.

Quoting and Budgeting Jobs

Job costs are managed by comparing the budgeted costs and income with the actual job and overhead costs.  Review the following sections for more details on these powerful job costing tools:

Managing Job Materials

  • Job materials overview:  Review Job Materials Overview
  • Creating job materials from a budget or quote:  Review Materials List within a proposal
  • Request for quote (RFQ) and creating purchase orders:  Review Material Purchase Orders
  • Subcontractor labor:  Review Subcontractor Labor within a Job Transfer

Job Cost Tools

An important option within the system to enhance the management of direct job costs is to enable the Direct job cost account option. Review Job Costs > Direct Job Cost General Ledger Accounts.

Review Job Costs > Evaluating Job Costs for more details on managing costs based on job stages.  

Billing Jobs

The EBMS job costing system includes various billing methods. Review the following sections for billing options.

Work in Process

EBMS will conveniently report work-in-process totals and process appropriate monthly transactions to financial reporting purposes. Work in process transactions are generated using either the Completed Contract or Work in Process accounting methods. This feature will take the "headaches" out of the necessary work-in-process procedures. Review the Work in Process section for more details and process instructions.

Job Overhead

Company or profit center overhead costs can be distributed to jobs, groups of jobs, or stages based on the stage classification or profit center. This allows the user to properly report the profits (or losses?) for a job

Job Management

Review Job Management Reports to review reports used to manage jobs.

Review Evaluating Job Costs for various ways to evaluate costs applied to a job. including overhead or hidden costs. Comparing the actual costs with job budgets is the primary goal of proper job costing.  Review Overhead Costs for options and setup instructions.

Job Tasks

The task module can be an excellent enhancement to the jobs module. Tasks can be used to schedule and track labor within a construction or manufacturing job. Tasks can also be used to track labor within a job that manages a contract such as an annual service contract.  Review [Labor] Tasks > Managing Tasks > Using Tasks and Job Costing for instructions to combine these two powerful features.