Most contractors on the South Shore can tell you whether last year was good. Far fewer can tell you which jobs made money and which ones quietly lost it. That is what job costing answers, and it is one of the fastest-rising QuickBooks topics among contractors.
Here is a practical guide to doing it in QuickBooks Online, without turning your evenings into data entry.
What job costing is
Job costing means tracking the income and costs for each job separately, so you can see the profit on each one. The costs usually fall into a few buckets:
- Materials: lumber, fixtures, roofing, wire, pipe.
- Labor: your crew’s wages and the employer costs that go with them.
- Subcontractors: electricians, plumbers, excavation.
- Equipment and other direct costs: rentals, permits, dumpsters, disposal fees.
Compare those costs to what you billed for the job, and you know what the job really earned.
Why it matters
- Better estimates. When you know what a bathroom remodel actually costs you, your next quote is sharper.
- Spot problem jobs early. A job running over on materials can be addressed while it is still open.
- Know which work to chase. Some job types consistently earn more. Job costing shows you which.
Setting it up in QuickBooks Online
1. Create a customer or project for each job
In QuickBooks Online plans that include projects, each job can be a project under its customer. In other plans, each job can be set up as a sub-customer. Either way, every job gets its own place to collect income and costs.
2. Tag every cost to the job when you record it
When you enter a bill from the supply house, a receipt, or a subcontractor invoice, assign it to the job. This is the single most important habit. Costs that are not tagged to a job are invisible to job costing.
3. Get labor onto the job
Labor is usually the biggest cost and the hardest to track. If your crew tracks time by job, that time can be used to allocate labor costs. Your payroll provider’s reports are the starting point; payroll itself stays with them.
4. Invoice from the job
Invoices and payments recorded against the job complete the picture. Customer deposits received before work starts should be recorded so they are not mistaken for income you have already earned.
5. Run the job profitability report
QuickBooks Online offers reports by project or customer that show income, costs, and profit for each job. Review them monthly, and for any big job, while it is still running.
Your job costing setup
Tick each step once it is set up.
0 of 5 set up
Common mistakes
- Tagging costs “later.” Later rarely comes. Tag when you record.
- Leaving materials in the truck. Receipts from the supply house need to get into QuickBooks, photographed or shared digitally.
- Mixing jobs on one bill. When a supply run covers two jobs, split the bill between them.
- Ignoring small jobs. Small jobs add up, and they are often where margins are thinnest.
- Forgetting overhead. Job costing shows job profit. Your overhead, such as insurance, vehicles, and the office, still has to be covered by the total.
Where a bookkeeper helps
Job costing only works if the costs get tagged and the books stay current, every month, including busy season. That is the part most contractors struggle with, not the setup.
For our trades clients, we keep the books in QuickBooks Online, reconcile every account monthly, and keep reports current so you can check a job’s numbers from the truck. When something looks off, you call and talk to a professional who knows your business.
Frequently asked questions
For most owner-run trades, QuickBooks Online set up properly is enough. Larger contractors with complex progress billing may need more.
We can look at your file first. A QuickBooks evaluation reviews how it is set up, and a findings call walks through what would need to change.
Yes. QuickBooks training is hands-on, online, in your own file.
Start with a conversation
If you run a trade in Hanover, Pembroke, Marshfield, Scituate, Rockland, or anywhere on the South Shore, request a free consultation. Tell us about your trade and where the books stand. Prefer the phone? Call 781-924-1489.