Which of your revenue streams are delivering the highest profits? Many businesses have had to pivot their operations and may be seeing new trends due to the current situation. It is important to know which products or services are trending upward and which are trending downward.
To answer critical business questions like those, you need to perform accurate job costing. Let’s look at what that means and how you can do it faster and better.
What is job costing?
Job costing is the process of determining the cost of performing a given job and the amount of income you’ll generate by completing that task. Your main income statement shows how all your operations are doing. Job costing slices and dices that data so you can examine individual projects.
Benefits of doing the job right
Job costing can help your business in a number of ways:
- Identify which revenue streams generate profits and which are loss leaders
- Determine customer acquisition costs
- Find new areas in which you can cut costs
- Track performance for sales and other departments
- Shift your focus to the projects that deliver the best return on investment
Where many companies go wrong
Especially if you offer dozens or hundreds of products or services, job costing can get complicated fast. If you use outdated accounting software, it’s going to take a lot of time to work up the numbers you need, and you might not be able to provide them at all.
To perform fast, accurate job costing that answers all the questions you have about every project, you really need high-powered software like Sage Intacct, the best-in-class cloud-based accounting software solution.
Sage Intacct can easily categorize your revenue, expense receipts, labor time and costs, overhead, and other data for every job. It also integrates with Salesforce.com and other applications, and it offers customizable dashboards so decision-makers can look at data and trends in different ways and across different time periods.
By automating project management, project billing, time tracking, revenue recognition, and more, you can get the job costing information you need, while also freeing your team to focus on higher-level tasks.
Learn more
Insero & Co. is a public accounting firm with decades of experience working with both small and large businesses. Our experts are available to help you identify the right accounting solutions to streamline operations, compete more effectively, and grow your business.
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About the Author: Kimberly Gangi
