Tell me how much that costs now! How to do job costing in real time
If your managing director called you into his/her office and asked for an accurate update on the costs of every project currently in progress across the business, could you provide it?
Would you be able to give a cost-to-complete estimate, or talk about how costs to date match up with the percent-complete on a particular project?
If the answer to any of these questions is no, there is a gap in your business. It’s a long-established gap that exists within many organisations (although none of the top performers) in industries such as project engineering, building services and maintenance.
This is the gap between the field and the office. The gulf between operations and accounting. Traditionally, these two environments are worlds apart and many businesses are content to let them stay that way. However, the best organisations know that integrating the two is the key to achieving better visibility, controlling costs more tightly and ultimately driving greater profitability.
Bridging the gap
This gap we’re talking about makes it impossible to get a real-time update on how much a job is costing and whether or not it will be profitable. It exists because, in many companies, it is still normal for operations to be run in one system and details of the transaction to be logged for accounting purposes in another, separate piece of software.
Integrating these two functions – essentially your accounting and project management functions – in a single business system makes it possible to bridge the gap and keep an eye on profitability at every step of the way through a project.
This is what an integrated job costing solution can provide.