Job Costing 101 for the Trades: Are You Actually Making Money?
By Aaron Buster | July 14, 2025
You just finished a big landscaping job. The client paid, your bank account looks healthy for a moment, but then you pay your crew, the supplier for the materials, the fuel bill... and suddenly the account is empty again. Sound familiar? For many in the trades, this is a constant cycle. You're working hard, but you're not sure if you're actually making money on each job. This is where job costing comes in.
Why "Gut Feel" Fails
Pricing jobs based on what "feels right" or what your competitor charges is one of the fastest ways to go out of business. You might win bids, but you could be losing money on every single one without realizing it until it's too late. Material costs fluctuate, labor hours can exceed estimates, and hidden overhead costs can eat away at your perceived profits. To build a sustainable business, you need data.
The Three Pillars of Job Costing
Accurate job costing isn't complicated. It just requires you to track three key categories of expenses for every single project:
- Direct Costs: These are expenses you can tie directly to a specific job. Think of the lumber, pipes, or plants you buy for that project, and the wages of the crew members who are physically working on that site.
- Indirect Costs (Job-Related Overhead): These are costs that are necessary for the job but aren't part of the final product. This includes fuel for your trucks to get to the site, small tool rentals, or the salary of a project supervisor who oversees multiple jobs.
- General & Administrative (G&A) Overhead: These are the costs of simply keeping your business open, whether you have a job or not. This includes your shop rent, liability insurance, office staff salaries, and accounting software subscriptions. A portion of these costs must be allocated to every job to understand its true profitability.
How to Track It: A Simple QuickBooks Setup
The best way to track this is by setting up your accounting software correctly. In QuickBooks, for example, you can use the "Projects" feature. By creating a project for each job, you can assign every single expense—from a box of nails to an hour of labor—to that specific project. When the job is done, you can run a "Profit and Loss by Project" report to see exactly how much you made or lost.
The Confidence of Knowing
Job costing isn't just an accounting exercise; it's a business intelligence tool. It gives you the confidence to know which types of jobs are most profitable, which ones to avoid, and how to price your work to guarantee a healthy margin every single time. It transforms your business from a guessing game into a predictable, profitable machine.
If you're tired of the feast-or-famine cycle and want to get crystal-clear on your job profitability, schedule a call with us. We can help you set up a job costing system that works.