More effective use of software technology could bring the construction industry up to $1.6 trillion annually in incremental value. Your job cost accounting is one area that’s most likely overdue for a technology solution. Manual processing for job cost accounting can lead to expensive errors as you end up losing money and time. 

Job costing systems can help. There are success stories of users cutting their AP processing time by 83%, saving more than 50 employee hours monthly. 

With the right system, you can streamline processes, improve profits, and increase customer satisfaction. Learn more about how accounting systems like Sage Intacct can improve your job costing and benefit your business. 

Importance of Accurate Job Costing 

Accurate job costing is critical for the success of your business. Job costing has several goals, including: 

  • Understanding the profit or loss of each job 
  • Analyzing how well you manage estimates 
  • Finding inefficiencies and excess costs 

Properly managing job costs over the life of the project helps ensure you make money on every job. If the actual cost of a project is higher than you estimated, you lose money. 

Better job costing can improve profitability. It can help you better manage employee scheduling and it’s a key factor in making financial reports on time. 

Job costing also helps you balance revenue and costs for each project. You can use historical data to better plan future projects. Accurate job costing reduces the likelihood of unexpected expenses during the project. 

Your accountants and finance department need good job costing for back-office processes. Not to mention, you need accurate job costing when filing your business’s taxes. 

What Does Job Cost Accounting Involve?

Job costing is also called project-based accounting. It tracks the costs and revenue for each project. 

Labor Costs 

To calculate your labor costs, you need to know how much your company pays all the staff who are working on the project. Then you can multiply the payroll day rate by the amount of time you estimate the job will take. 

Material Costs 

Material costs include direct and indirect costs. Direct material costs cover raw materials that make up the finished product. Properly estimating the cost of your materials is especially important as prices continue to skyrocket. 

Indirect costs refer to materials necessary to finish the job that isn’t part of the final project. Tools and machinery are examples of indirect costs. 


Overhead costs are challenging to estimate. They require you to break down your daily operating costs and attribute the right proportion to each project. Overhead costs include a wide range of expenses, like rent, electricity, and internet. For instance, many businesses apply a general overhead fee, like 10% per job. 

You can also calculate an overhead rate using your estimated yearly overhead and activity. For example, you estimate that you’ll have $500,000 in overhead costs and your employees will work 10,000 hours this year. 

Divide the overhead by the direct labor cost. This gives you a $50 applied overhead cost per hour worked. For every direct labor hour in your job costing, you’ll add $50. 

Total Job Cost 

After you calculate the cost of labor, materials, and overhead for a job, you can find the total job cost. Add the three subtotals together to get your complete job cost. 

Challenges with Manual Job Cost Accounting 

Accurate project costing requires detailed and precise data. Manual processing can hold your company back through inefficiencies and errors. 

Job cost tracking requires cooperation at all levels of your company. An employee or manager who doesn’t see the value in detailed job cost record-keeping can stall the process for everyone. 

Communication is critical, especially between the field and the office. Your people in the field know which materials they received for which jobs. They have to give this data to your accounting team to ensure that the right costs go with the right projects. 

Company credit and debit cards don’t usually include a job name or number on the receipt. You have to rely on the employee who used the card to provide that information to bookkeeping. When bookkeepers can’t easily find job number information, errors are likely. Your reports may include accidental misinformation. 

Benefits of Sage Intacct for Job Costing

Sage Intacct Construction makes job costing easier in many ways. You avoid the problems that manual processing can cause. 

Increase Profits

Sage Intacct helps you increase profits through more accurate estimates. Process automation reduces errors. The software can automatically assign costs to projects based on your predefined business rules. 

You can see the true financial impact of past projects. You have insight into profits and overhead at a granular level. Better historical data improves the quality of your bid. 

Lastly, you can be more confident that your estimate has a competitive margin. 

Reduce Revenue Leakage

Sage Intacct reduces revenue leakage through an integrated process. The software uses data from sales, finance, and operations. You get real-time information about: 

  • Budget vs actual 
  • Billed vs unbilled expenses 
  • Billable vs unbillable hours 

You can track change orders and amount triggers. You can manage the project more easily. 

Better Cash Flow

Sage Intacct project costing and billing software can improve your cash flow. It streamlines and accelerates your invoicing and billing cycle. 

You can create a consolidated invoice with different billing terms for one or more projects. You can base invoices on factors such as: 

  • Time and materials 
  • Milestones and fixed fees 
  • Percentage completion 

You can format custom invoice templates to meet client specifications. 

Real-Time Reporting 

Job costing software from Sage Intacct gives you real-time cost information. You can see how a project is meeting estimates while it’s underway. You can make adjustments if necessary. 

Higher Customer Satisfaction 

Accurate estimates let you set realistic expectations for customers. You can keep clients updated throughout the project. You can easily meet customer requirements for different billing terms and invoice formats. 

Improve Your Job Cost Accounting with Sage Intacct

Even when you know how to job cost, the process can be complex. Sage Intacct project costing and billing software automates and streamlines the process, enabling you to increase profits, improve cash flow, and serve your customers better. 

If you want to see construction job costing in action, attend one of Sage’s daily Sage Intacct Construction demos! Or, reach out to Bangert and one of our experts can show you what solution works best for you and your company.