Job Costing Updated July 05, 2024 22:59

Overview

When running a business, it's important to understand your profitability. There are many factors that go into making a profit, including your pricing, labor costs, and expenses. To make sure that you are staying on track, job costing is available on both one-off and recurring jobs where you can see your profit margin, profit, and total price.

Your profitability is calculated using:

• Timesheets - based on the hourly cost of your employees and their time worked on a job
• Line items - including both unit costs and unit prices
• Expenses - these are the expenses logged on a job

Job costs are internal, so your clients won't see your profits or costs. Only employees with job costing permissions will be able to view the profit bar on jobs.

Settings

To get started with job costing, there are some settings that you may first wish to adjust. 

Set your hourly labor cost

Each user can be set up with a labor cost in order to calculate job profitability.

Navigate to the Gear Icon > Manage Team then select your user. From the labor cost section, enter the employee cost in dollars per hour. The employee cost should include the employee's wage, benefits, and taxes. When you're done, click Save User. 

When employees log their time using time sheets in Jobber, their labor costs are calculated based on their current labor rate and time entries for the job. The labor cost will apply to their future time sheet hours, not any past time sheets. In the future if your team member gets a raise and their labor cost is edited, the new employee cost will apply to their time sheets going forward. Learn more about timers and timesheets.

User permissions

Also from Settings > Manage Team, there is a user permission setting for job costing that when enabled, allows non-admin team members to see job profits that are calculated from line items, labor, and expenses. Admin users have access to job costs within their admin user permissions. In order to turn on the job costing permission for a non-admin user, team members must also have access to the following permissions (at miniumum):

• Show pricing: Enabled
• Timesheets: View, record, and edit everyone's timesheets
• Expenses: View, record, and edit everyone's
  • Note: for non-admin users to have this permission setting, expense tracking needs to be enabled first (Settings > Expense Tracking)
• Jobs: View only

Once these are enabled, the job costing permission can be toggled ON.

Note: the job costing permission is different than the "show pricing" permission which controls whether a user can see line item prices and costs. 

Set up your line items

For job costing, line items need to be set up with a unit cost in order to calculate the job profitability. Unit costs can be added to the line item on the quote or job level, or from your products and services list. 

From the job, in the line items section, select New line item then enter your line item or select from the list. Make sure there is a quantity, unit cost and and unit price entered. 

Note: As a best practice, we suggest only adding costs to product line items for material costs. Since costs can be both stored on line items and also on labour (timesheets) and expense entries, the job profit can be inaccurate if the same cost is accounted for twice. To ensure accurate job profitability make sure not to add labour costs to line items, but instead record them using timesheet expenses. If labour costs have been added to line items at the quote level, and then are being double accounted delete the costs on the line items at the job level to correct.

Costs on jobs

The way job costs are calculated for one-off and recurring jobs varies. For one-off jobs, the job cost is calculated based on the entire duration of the job. For recurring jobs, since you may be performing the job for several years, the job costs are calculated based on the last 30 days (including today). Recurring jobs also vary in that they may be set up either as fixed price jobs (where the client is paying a flat rate each month), or recurring jobs that are billed per visit.

On your jobs, there is a section that includes your line items, timesheets, and expenses which is what makes up the the calculation for your job profitability. At the top of this section is your "profit bar" which shows:

• Profit margin % (calculated by profit / revenue * 100)
• Total price (This is your revenue, calculated as the sum of the line items on the job. This is pre-tax and excludes discounts)
• Total line item costs (This is the total of the line item costs, ie. the cost that you pay for a product or what a service costs you)
• Total timesheets costs (these are your labor costs)
• Total expense costs (these are expenses associated with this job) 
• Profit (revenue - total costs)
• A visualization of the line item cost, labor, expenses, and profit 

For fixed price recurring jobs, revenue is calculated by multiplying the price of the line item by the number of invoice reminders scheduled in the last 30 days.

For per visit recurring jobs, revenue is returned as the job line item price multiplied by the number of visits with a start date in the last 30 days.

These calculations are for this job only. 

To populate the profit bar, click Calculate Profitability. Note that this will not add labor costs or line item costs to the profit bar as these values did not exist before May 4 2023 when job costing was introduced into Jobber. You can manually edit the costs for the job to add them in.

To minimize the profit bar, click Hide Profitability. When hidden, to view the profit bar, click Show Profitability. 

Line items

Below are your line items where you can add quantity as well as both unit cost and unit price. 

Note: The unit cost is the amount that you've spent on a line item. The unit price is the amount charged to the client for the line item. 

For one-off jobs or recurring jobs with a fixed price, the line items cost is calculated as the total of the line item costs. For recurring jobs with fixed price billing, if there are visits with custom line items that are different than the line items on the job, the custom line items are taken into account for the job profitability calculations. To see the number of visits and the line item cost and price, hover over the line items tooltip. 

Labor

Next are your timesheets which calculate the labor for this job based on the time worked and the employee cost. Time sheets can be added both manually from the job, from time sheets on the side navigation, or by using timers in the Jobber app. 

We display the labor timesheet entries without showing the seconds, but we calculate the labor costs with the seconds to ensure accuracy. This means that sometimes the labour cost for a time entry is slightly different than what you would get if you multiply the hours and minutes by the labor cost rate, as we are calculating the value by multiplying the labour cost rate by the duration including seconds.

If a team member has a visit timer currently running, it will be indicated by a running clock icon. Labor costs are not calculated until the timer has been stopped. 

To manually add time, select New Time Entry to manually add time that an employee has worked to this job. Then enter the:

• Start time an end time (duration will be automatically calculated based on these times)
• Notes
• Date
• Employee cost per hour

Below the fields, you'll see the total cost based on what you have filled out. When you're done, select Save Time Entry. 

Expenses

Expenses can be added both from the job as well as from Expenses on the side navigation. Expenses associated with the job are part of the profitability calculation. 

To add an expense manually, select New Expense. Then enter the:

• Expense name
• Accounting code (these are set up from Settings > Expense Tracking)
• Description of the expense
• Date
• Total
• Reimburse to
• Receipt

When you're done, select Save Expense. 

Note: Expenses added from the job do not have an option to assign a team member to be reimbursed. 

Reporting

The one-off jobs report includes the following job costing columns: 

• Expenses total ($) - Sum of all expenses associated with that job
• Time tracked - Number of hours billed to a job. Displayed as HH:mm
• Labour cost total ($) - Sum of the cost of labour associated with the job. This would be the total cost for each time entry associated with the job 
• Line item cost total  ($) - Sum of line item costs 
• Total costs ($) - Expenses total + line item + labour costs total 
• Profit ($) - Job revenue - Job costs 
• Profit % - ((job revenue - total costs)/job revenue) * 100 

To view the one-off jobs report, select Reports from the side navigation. Under Work Reports, select One-off jobs report.

See the full column list and learn more about the one-off jobs report. 

Note: Reporting is not available for job costs on recurring jobs.

Syncing with QuickBooks Online

With the NEW QuickBooks Online integration, costs initially sync from QuickBooks into Jobber. After the initial import, Jobber becomes the source of truth for costs so going forwards changes made to your costs in Jobber will be reflected in QuickBooks.

FAQ

What about jobs created before May 4, 2023?

If you have a job created before May 4, any line item costs present on the quote or products and services list will not show on the job costs. This is because the job costs model didn’t exist before May 4. When a job is created the line items are independent of both the products and services list and the quote line items, i.e.  if you have a job created from a quote with a price of $10 and then you update quote line item price to $20, the job will still be priced at $10. It’s the same for costs.

Labor costs are not applied to previously existing timesheet entries. Only new timesheet entries created after a labor cost has been applied will have the labor cost. This is to allow the user to updated labour costs (due to a pay raise etc) and keep the integrity of old timesheet costs.