In a recent blog, we discussed why you need connected construction software for your business. Today, we’ll explore construction job costing, why it’s important and how Cloud ERP – construction management software provides critical job costing assistance.
What is Construction Job Costing? Why is It Important?
Job costing is the process that tracks the costs associated with a project, including materials, labor, and overhead. Having a detailed view of all the costs associated with a job enhances a construction company’s ability to monitor how a project is performing to make sure it is within the planned budget, time, and productivity. Job costing is crucial for construction companies because it provides insight into project activities, costs and project profitability. By keeping track of job costing by project, a construction company can compare projects to see which ones are on track and which need to get back on track. Job costing also will help construction firms assess the viability of new projects, and if found viable, help them create accurate bids.
Though beneficial, job costing can be a challenge because tracking requires meticulous record-keeping by multiple employees. For example, tracking materials (those specific to a particular project and those used for multiple projects), labor (hourly/daily rates as well as overtime and workers’ comp), and overhead (general operating costs along with unique costs for a worksite, such as office space, equipment rental, etc.) can make it complicated to track and allocate shared costs across projects.
Solving Job Costing Inefficiencies with Construction Management ERP Software
Due to the complexity of tracking job costs across multiple projects, spreadsheets or simple accounting software, like QuickBooks, will quickly become a headache for construction companies. Many tried to solve the problem with hobbled-together software, but that leads to disconnected data, wasted labor, job cost inaccuracies and more headaches. Other companies struggle with out-dated software that doesn’t meet the needs of today’s modern construction firm. The problems add up to inefficiencies that will negatively affect the bottom line.
Job costing inefficiencies caused by manual processes and legacy solutions are solved with modern construction management ERP software. Specifically designed for the construction industry, construction ERP software integrates financials, payroll, inventory, service management and job cost accounting onto a single, centralized platform for end-to-end business management
With every department and employee on the same system and accessing the same information at the same time, construction firms open the door to improved collaboration, increased efficiency and informed decision-making. NexTec’s Construction Management: ERP Selection Guide looks at the many benefits, including the ability to track projects—and their costs—in real time.
“ERP for construction manages all the small moving parts that make up a project. With integrated software, project managers can easily track costs and compare them to budgets, view and sort important documents and collaborate with other users. Because accounting and project management are connected in one platform, users get greater visibility into budget versus actual costs, change orders, subcontractor commitments, compliance issues and more. As team members input information into the system, real-time updates ensure all users are accessing the most current documentation (such as RFIs, daily field reports and change orders).”
Essentially, Construction ERP software, like Acumatica Cloud ERP: Construction Edition, makes job costing delays and errors become a thing of the past and benefits, such as effective cash flow management and increasing profit margins, become things of the present—and the future.
Acumatica Cloud ERP: Construction Edition Built to Connect Your Business
Acumatica Construction Edition provides industry-specific features and functionality to improve the way construction professionals work. It is a true Cloud solution that provides a consistent experience for all users, whether they access the system from a phone, tablet or desktop. Acumatica’s unique pricing structure focuses on the computing resources a company uses, not the numbers of user licenses needed. This means that the solution grows with your company, and you’ll only pay for what you use.
NexTec Group can help you select and implement the right ERP with construction job costing for your business. We are a gold-certified Acumatica implementation partner with more than 25 years of experience in the consulting industry. We take a holistic approach to integrating the many moving parts of your business to remove the manual guesswork and improve your ROI. With deep industry experience in construction, NexTec understands the challenges construction companies face and provides solutions tailored to their specific needs.