Small to medium businesses who work on a construction or professional projects may well benefit from the use of Xero Accounting software. Recommended by many chartered accounts, including our team at David Howard, the Xero cloud-based platform could solve a lot of accounting issues for your company - especially when it comes to job costing.
The Importance Of Accurate Job Costing
When a company supplies its services on a per job basis, for example: in the construction trade, they need to estimate each job before they begin and set a suitable budget for their work. The estimate needs to be as near as possible to the final price otherwise, the customer will be highly dissatisfied, and the company also needs to make a profit on their work. The contractor needs to know what to charge for variations and how profitable the project was based on actual cost and time spends.
Working Out Job Costs
There are three key things involved in pricing up a job: the materials, the labour, and covering your overheads. A precise estimate can only be generated when the cost of these three areas is fully considered. For the manufacturing industry, this can be fairly simple – costs and pay rates tend to be fixed. For service trade companies such as builders and plumbers, however, the cost of each job can vary dramatically. Every job is unique and there are many different variables to consider, particularly where clients change ask for alterations or unforeseen difficulties arise during the work.
How Xero's Job Costing Software Makes A Difference
In order to produce an accurate estimate, contractor companies have to gather as much information about the job ahead as they can and then calculate the overall cost based on a multitude of figures. This can be time-consuming and difficult and there is a high chance of an error being made.
On the other hand, specialist job costing software like Xero Accounting can make the process simple for you. Just input the various cost estimates for the job and the program will give you an accurate estimate based on your figures. This greatly reduces the risk that a job will go over budget, so you can concentrate on delivering that great result for your happy customer.
In addition, the software can match up the projected costs of the project with the actual costs, giving you a running total of the estimate versus the true price. If there is a danger of running over budget, you can spot it early and either liaise with the client or start to make some cutbacks. Either way, you can tackle and resolve the problem well in advance.
Introduce Xero Accounting To Your Business
If your business is looking to implement job costing software such as Xero Accounting, the tech-savvy team at David Howard can help. Our chartered accountants are extremely knowledgeable about Xero programs. We can install your software, teach you to use it and even manage it for you. Get in touch today for more information.