If you’ve ever wondered what it really costs to produce a specific product, you’re talking about job costing. When we do this, we are tracking what goes with what project – and how much is spent in overhead.
Generally, at Bookkeeping Made Simple, we do this for our real estate flippers and construction clients. Knowing how much each widget you produce costs you helps determine pricing and (hopefully) avoid cost overruns. When you know your numbers, you can run your business effectively, and the cost of each job, especially if they are large jobs, is a crucial number to know.
When running job costing, we need to track both direct costs and indirect costs (overhead). Not every item can be costed to a specific job. As a business owner, you need to make sure that your direct costs and overhead are less than the price charged to provide a product or service, or you won’t have a profit.
We can help you determine if job costing is appropriate for your situation. Right now, we’re offering a free strategy session to qualified businesses. To see if you qualify, call us today at 801-692-0032. Our team is ready to help you improve your business!