Bookkeeping
Job costing 101: knowing what each project really earns
By Auxilee ·
Most builders and investors can tell you their revenue for the year. Far fewer can tell you, per project, what they actually kept after labor, materials, subs, and overhead. That gap is where margins quietly disappear — and job costing is how you close it.
Start with a cost structure that mirrors how you work
Your chart of accounts should reflect the phases and cost categories you actually manage: labor, materials, equipment, subcontractors, and general conditions. If your books lump everything into a single 'expenses' bucket, no report will ever tell you which phase of a job ran over.
Assign every transaction to a job
Job costing only works if every dollar in and out carries a project tag. That means receipts coded at purchase, subcontractor invoices matched to the right job, and owner draws kept separate from project spend. It is unglamorous weekly work, and it is exactly what good bookkeeping provides.
Read the variance, not just the total
A job that comes in on budget overall can still hide a framing phase that ran 15% over and a finishes phase that came in under. Reviewing budget-to-actual variance by phase each month is what turns historical numbers into better bids next time.
If your current reports can't answer 'what did this project really earn?', that's a solvable problem — and usually faster to fix than most owners expect.