As the owner of a small business, you may find yourself curious about job costing. That’s a good thing! It means you want more insight into your finances and productivity.
However, most payroll providers don’t offer full and true job costing. (We can’t think of anybody who does!) Is there any way around this?
At CSI Accounting & Payroll, we’ve worked with small businesses for over 50 years. We’ve been asked if we can do job costing through payroll. We don’t advertise that we do job costing, but we have methods to do “estimated job costing”.
In this article, we’ll tackle these questions:
Before we get into this part, remember – most payroll providers don’t offer job costing through payroll, including CSI (although we do offer certified payroll for government projects on a case-by-case basis).
However, we still want to define what full job costing might look like. Job costing is essentially the same thing in payroll as it is in accounting. In the instance of payroll, it’s figuring out how much of payroll goes toward each job.
Let’s use an example.
You own a construction company that builds about 50 homes per year, and you have some employees (supers) and many subcontractors. Your workers may work three or four jobs per week, and they assign different amounts of time to each job.
You know your company’s total expenses for the year, but you want to find the expenses per house (including payroll expenses) so you can improve your profit margins in the future.
For full payroll job costing, you want your payroll service to code someone’s payroll hours per job. How much does the super cost? What about the subcontractors?
However, your payroll provider will only know the total number of hours the person worked. Plus, with each job being temporary, they would have to constantly be adding new jobs to their system.
Since this isn’t a realistic option, what can they do instead?
A more realistic expectation of a payroll service is to get estimated job costing.
When you partner with CSI, we can help you determine how much an employee costs you per hour, including:
The next step is you tracking the hours per job (which our timekeeping software can do for you). You just have to set up the jobs in the system, and it prompts your workers to select which job they’re working as they clock in.
The hourly cost per employee (the number that we find) combined with the tracked hours per job (the number that you find with our timekeeping software) can be used to determine the estimated cost of labor per job.
We can’t claim to own this concept, though. Recently, we’ve heard of other software solutions that can also assist with this – provided they can integrate with your bookkeeping solution to allow you to attribute payroll costs to jobs.
However, with CSI, you don’t have to worry about this – especially when your accounting and payroll can be handled under one roof. Peace of mind can be worth a lot!
Now that you know about full payroll job costing versus estimated payroll job costing, are you ready to check out payroll services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about the cost of a payroll service by clicking the image below: