In Issue 25 of NZ Landscaper, we heard from Simpro on what job costing is and how to streamline the process. Now, it’s time to explore three tips to track performance and how to better integrate job costing into your management process
With the job costing formula under your belt, it's time to look at job costing reports and how they help your business. They're an essential tool for any field service business, as they allow you to analyse and monitor the cost progress of jobs for job tracking. For example, you can take a look at the actual costs of an ongoing job and measure them against your estimated costs, which lets you evaluate a job's performance and pinpoint any discrepancies.
A common type of report that goes hand-in-hand with job costing is the work-in-progress (WIP) report. A WIP report can be used in conjunction with a job costing report against any jobs that are partially completed or still ongoing. They normally run towards the end of the calendar month or accounting period to help analyse the total costs accrued for specific jobs up to that point. You can then see any remaining payments that are due to come into the business for any partially completed jobs.
At the end of the day, the more visibility you have into your business finances, the more efficiently you can manage costs and ensure proper cash flow.
Three job cost tips to track performance
Keep a close eye on the costs. Don't become complacent with reporting, and make sure you're regularly looking at job progression. The last thing you want is to go weeks thinking a project is on track, only to discover it's over budget. It results in a very uncomfortable conversation with the customer or the business absorbing the additional costs, affecting your bottom line.
Be consistent. Get into the habit of reporting regularly and consistently. Whether weekly, monthly or quarterly, just make sure you don't let things slide by the wayside. It's essential to stay in touch with visibility and profitability.
Be specific. Don't be afraid to get into the detail with reporting to retrieve the information you need for each job. Depending on the job costing software, there will be a lot of different variables to play with. It may take a few tries and a couple of dead ends, but stick with it!
Integrating costing into your field service management software
Following a consistent job costing formula and keeping profitability in mind helps drive business growth. And, with field service software, analysing specific job details and looking at your revenue generation is a huge step toward having a technology-based workflow. So, where does job costing fit in?
As long as you remember the job costing formula, you're on the right track. It can be done manually every time, but that can also become tiresome and tedious. Most accounting software integrates with field service management software, killing two birds with one stone. So, why not let them do the heavy lifting? It speeds up the time taken to calculate a job's cost and leaves you with extra time to focus on other areas of the business.
With in-depth reporting features based around different areas of a job and the ability to filter or select specific categorisation, you gain knowledgeable insights into a job's progress and profitability. You can then use this information to adapt workflows that are not bringing your business the best results.
For example, if you're running a report on how much a job in progress has cost your business based on materials and labour, you can then look at your original estimate for the work and ensure it's on track for what was initially planned. Sometimes unforeseen circumstances can add to costs, such as poor weather conditions or additional materials required. So, using a dedicated reporting system allows for complete visibility.
Job costing made easy
To keep your business thriving and growing, it's crucial to have a clear understanding of how to track profits and revenue. Keeping on top with an accurate job costing formula is the tip of the iceberg, but a very important one. To streamline your whole cash flow, from estimates and pricing to proper job management and more, field service management software can help. So what are you waiting for? Get started now!
If you’re looking for other ways to keep your business running smoothly, a field service management platform can help with everything from appointment scheduling and customer management to invoicing and fleet tracking.
See for yourself how Simpro could help you here: www.simprogroup.com