Job Costing – How does it work?
Job Costing is the most effective way for businesses from many sectors to ensure that they are operating in the most efficient way, and therefore maximising profits.
Direct costs such as materials, labour, and so on are accrued on a job to compute the total costs.
Our Time and Attendance systems can, using a more advanced terminal(s) supported by an extra software module, provide the time element of Job Costing. When an order (job) is accepted by the business it will be given some form of identification.
When assessing the job for manufacture, the whole may be subdivided into sub-jobs or processes if applicable.
Each job and sub-job will be identified by some form of machine readable number.
Your Time and Attendance software (with extra functionality) and more specialised terminals will be used to provide the time element.
Each time an employee clocks onto a particular job, the job number and their ID number are recorded, and their time will now be recorded on that job until they start on a new job.
The number of hours worked by all employees who clock onto that job will be used to calculate the actual time spent.
Job Costing – Benefits
• Jobs can be sub-divided into operations, enabling each operation to be calculated separately to determine if any single part is not conforming to your estimated cost.
• Handle batches of items produced in a time period to further enhance the data capture value
• Electronic job costing enables the exact recording of time spent on a job.
• Future estimates, and tenders can be made with confidence.
• Profit margins can be checked.
• Low profit jobs can be detected and corrected.