The request I receive most from contractors is "tell me how to job cost." Why don't they ask me to do something simple, you know, like solving world hunger.

Job costing systems are very, very difficult to get right. Setting up an effective job costing system requires a deft touch, a KISS approach, and an incredible understanding of employee behavior. Missing the mark by just a little bit results in the collection of useless information which defeats the purpose of tracking job costs.

A poorly designed job costing system wastes a lot of valuable time. On the other hand, when done correctly, job costing lays the foundation for running a successful operation. Its reach extends far and wide. Job costing is the driver of:

• Accurate estimating
• Accurate scheduling
• Effective management of field performance, and
• Effective bonus systems.

Most contractors know the importance of job costing and almost all would like to get better information out of their job costing system. The challenge is to design one that delivers the goods without being overbearing. Let's help you out with that. The first requirement is to KISS it. Keep It Short and Simple.

Short means that you should only track the tasks that burn up 80% of the job's labor hours. Simple means that you must be able to teach your employees how to use it.