What do you know about job costing? Payroll software has many fundamental features that benefit most organizations, yet there are features that your payroll provider probably has, that you might not be aware of, that can assist and help you reach your organization's goals. What’s more, they might come at no additional charge. Whether you’re satisfied with your current payroll and HR software provider or shopping around, I strongly suggest learning more about the valuable secondary features offered, such as Job Costing, Group Scheduling, and Report Scheduling to name a couple. I’m here to share more about job costing and help you decide if it would be a beneficial feature for your organization.
What is Job Costing?
Job costing is an industry-specific process of tracking the expenses incurred within a particular job, department, or other client-defined categories. This information is used to determine how much a particular area is costing the company, comparing that information against a budget, and/or determining how much to bill your clients for a given job.
What Are the Pros and Cons of Job Costing?
Pros of Job Costing
Allows managers to calculate the profit earned on individual jobs, helping them make more desirable decisions.
Computer and mobile punching options allow employees to punch directly into job costing accounts, allocating hours in real-time.
Most job costing tools offer the ability to transfer into new job costing accounts with only one punch, alleviating time spent at the kiosk.
The feature works great with Dominion’s time clock app.
Accuracy: Employee punches are instant and accurate. You won’t waste time questioning sloppy handwriting.
Reporting from job costing punches will be accurate, instant, and effective to analyze data.
Management can estimate the cost of jobs from historical records on similar jobs.
Cons of Job Costing
You depend on your employees to accurately allocate their time by punching in under the right job.
If an employee transfers jobs more than 4 times per day, the time spent transferring could be tedious. A better option may be allocating hours after the hours are worked.
Time clocks, typically, cannot be used for job costing because the hardware-software is limited to a single-level allocation.
Job costing can be expensive if it’s more elaborate through an ERP system, as opposed to a timekeeping system.
Who Would Benefit the Most With Job Costing?
It doesn’t matter how many employees you have, it’s all about your end goal. If you could benefit from the reporting available from tracking hours worked in a given area, then job costing could be a valuable tool.
Job costing is very beneficial for industries such as construction, non-profits, companies with research and development departments, or fitness centers. These and other industries typically require an analysis of expenses based on locations, client or role completed, for example. Tools that allow you to allocate hours to specific areas open up endless amounts of reporting for your team.
Questions to Ask Yourself to See if Your Organization Would Value from Job Costing
How often do employees move between jobs?
What’s your end goal?
How will you use this information?
Do you bill your clients for given jobs?
Dominion’s Job Costing
Dominion has Job Costing as an additional feature of our Time & Attendance software. Aside from a possible installation fee for a custom setup, there’s no additional charge for this great tool. Since our Time & Attendance product is seamless to our payroll and HR solution, the allocation of hours can be tied to your General Ledger reporting. For example, if you define a job as a Cost Center, the General Ledger can be split by Cost Center.
Interested in having a further conversation about Job Costing?
Email firstname.lastname@example.org or learn more about Dominion’s secondary features here.
See a demo of Dominion's Time & Attendance software by clicking the image below.