Business Accountants: Enhance Your Construction Job Costing: Expert Tips & Video Guide


Effective job costing is paramount for ensuring the profitability of your construction business. It involves meticulously breaking down each project’s expenses in real-time, allowing you to proactively address issues and maintain a healthy cash flow. This comprehensive guide delves into the invaluable tips and tricks of job costing, shedding light on how to streamline your processes and why adopting construction job costing software is essential. By establishing a robust job costing system, your company can not only grow but thrive in the competitive construction industry.


What Makes Construction Job Costing Challenging?


Construction job costing presents several unique challenges that necessitate the utilization of job costing software to overcome. As we explore these challenges, you’ll discover how such software can effectively resolve these issues for real-world construction companies.


1. Accurate Estimation of Job Costs


One of the primary difficulties in construction job costing is estimating costs with limited project information. The inherently unpredictable nature of construction, coupled with fluctuating material prices, makes precise cost estimation a daunting task. Traditional methods, like spreadsheets, often fall short in capturing accurate margins. However, modern job costing software, such as Buildertrend, revolutionizes this process, enabling precise cost calculations that lead to enhanced profitability.


2. Tracking Project Expenses


Relying on memory or disorganized spreadsheets to manage expenses is a recipe for financial losses in construction. Neglecting to track expenses systematically puts your business at risk. Job costing software, like Buildertrend, provides a structured platform for monitoring expenses, eliminating the potential for monetary losses. By centralizing financial data, it ensures no costs slip through the cracks.


3. Managing Change Orders


Change is a constant in construction projects, and managing change orders can be a complex task. Failing to document changes in writing and collect payments for them can result in substantial financial losses. Buildertrend’s Change Orders feature simplifies this process, ensuring that changes are documented clearly, leading to potential savings amounting to tens of thousands of dollars, as attested by Sneller Custom Homes & Remodeling.


4. Cash Flow Management


Construction companies often have numerous projects running concurrently, making cash flow management a significant challenge. Unforeseen expenses, delayed client payments, and uncertain future cash flow can lead to financial difficulties. Buildertrend Payments, a crucial financial tool, has transformed cash flow management for companies like Waunakee Remodeling. By enabling online payments and streamlining transactions, it ensures a consistent income stream, allowing your business to flourish.


How to Improve Construction Job and Project Costing


Enhancing your job costing process is crucial for maximizing profitability and addressing issues proactively. Follow these steps to refine your construction project costing.


1. Develop a Detailed Project Plan


Craft a comprehensive project plan that outlines the scope of work, designs, floorplans, and an initial budget. Accurate estimates and contingency planning should be integral to this plan, ensuring your profit margins remain healthy.


2. Leverage Software and Technology


Embrace project management software like Buildertrend, offering a unified platform for all your construction needs. Real-time updates, automated processes, and streamlined data entry reduce project chaos and improve cost management.


3. Perform Regular Cost Reviews


Stay ahead of costs by conducting regular reviews as the project progresses. Job costing software updates budgets in real time, providing a clear financial picture and facilitating proactive decision-making.


4. Use Historical Data for Cost Estimates


Utilize historical data from previous estimates to expedite the estimation process. Construction estimating software keeps this data accessible, eliminating manual data input.


Features to Look for in Construction Job Costing Software


When selecting construction job costing software, prioritize features that streamline cost management and boost profits. Here are essential features to seek in job costing software:


– Estimate Feature: Automate estimate creation, including formula automation and material cost databases for precision.


– Budget Feature: Maintain an up-to-date project budget with real-time updates on expenses.


– Accounting Integration: Seamless integration with accounting software like QuickBooks or Xero for accurate data transfer.


– Invoice Feature: Simplify client invoicing, ensuring clarity and timely payments.


– Purchase Orders and Bills: Automate two-way transactions, improving accuracy and preventing overspending.


– Change Order Feature: Document change orders efficiently to avoid disputes and capture additional revenue.


– Payment Processing Feature: Enable online payments to accelerate cash flow and provide flexibility to clients.


 

 

Your Outside Team

 

 

Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accountingbookkeeping, payroll services designed to help you achieve greater financial success.

You can click here to speak to a businessaccounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business. 

 

 

Contact 

Wellington Accountants | 

Business Accountants | 

Construction Accountants 

Property Accountants 

Contractor Accountants 

Hospitality Accountants |

Property Developer Accountants | Accountants Wellington | Wellington Accountant | Restaurant Accountants | Cafe Accountants | Business Consultation | Business Adviser

AddressLevel 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand 

Mail: PO Box 24-457, Wellington 6142

Phone04 889 29 75

New Zealand Accounting, Bookkeeping & Property Business Consultancy Services | Wellington & Lower Hutt Xero Property Accountants Business coach business consultation business adviser

Business Accountants: Understanding Changes in Residential Property Taxation

Recent years have seen significant adjustments to the tax landscape, particularly concerning residential property. The government has responded to calls from various quarters to address investor demand in this sector. Notably, recent changes have been initiated to reverse tax policies affecting residential property, aligning with promises made by both National and ACT during their election campaigns.

Read More »