Apr 26, 2019
Job Costing, in its simplest terms, links the money you spent on a job against the money you received to do a particular job. It is the process of tracking all the costs related to a project to determine its profitability.
A common misconception is that Job Costing is only for large contractors with a dozen employees. Since keeping track of all costs and expenses involves a lot of additional work for contractors and field workers, and most construction company owners do not see an immediate benefit, some contracting businesses still haven’t implemented Job Costing procedures despite the financial risks.
In Construction Accounting, there are two types of Cost of Goods Sold (COGS) – Direct Construction Costs and Indirect Construction Costs. Both are equally important in generating useful Job Costing Reports.