Job Costing
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Job Costing Software

The first software package built specifically for the construction industry is A-Systems JobView, which continues to provide for the accounting needs of the construction industry. JobView was created in 1978 by a contractor, a CPA, and a brilliant computer programmer. (In fact, the programmer invented what was arguably the first personal computer in 1975–the Sphere 1. His computer was the first to use "Control-Alt-Delete.") Their combined expertise laid the foundation for a powerful tool in cost accounting. It has 34 years of development–more than any other construction accounting package on the market.

The function of job cost accounting software is to track actual costs, compare them to the budgeted costs, and provide information about whether there is a variance between the two. Job costing can be used for the full spectrum of jobs, from monitoring costs of a multi-year project down to tracking costs on jobs so small that they are completed in less than a day. The goal is cost control.

Job costing software works like this:

• Enter the budget for a job, which means take the estimate and use it as the budget.
• Pay the bills for the job, assigning the costs to the appropriate budget category.
• Print reports that show how actual expenses compare to what was budgeted.
• Find problems in time to correct them, obtain Change Orders, etc.
• Make a profit.

Job cost accounting is a management tool, a tool designed to monitor and control costs. As a by-product of job cost accounting, the company handles its financial reporting, bonding, payroll, accounts payable, accounts receivable, purchase orders, inventory, W-2s, 1099s, and so on.

The key to job cost accounting is categorizing each phase of each job into a separate budget. A numbering system, called Cost Codes, is used to track labor, materials, equipment costs, subcontractors, and a catch-all “other” category. The industry standard was developed by the Construction Specification Institute, the CSI Cost Code System. With this system, every phase of every job has its own individual budget where actual costs can be compiled. Complex jobs can have budgets for thousands of Cost Codes, while a simple job may have a dozen or so. Costs can be tracked in as much detail or as little detail as desired.

Job Costing software is the tool that simplifies the whole process, making it quick and easy. You can find a construction accounting software review at the CPA Technology Advisor.