Job-Costing is way of allocating certain income and expenses to particular customer jobs that your company has performed work for. So, instead of allocating income and expenses ONLY to your business-wide profit & loss statement, your income/expense data can ALSO be allocated to specific customer jobs. You do this extra step in your bookkeeping to gauge your company’s per-job performance efficiency.
My client, Veronica, has just such a requirement that she needs in her bookkeeping, as she is always concerned she is spending too much money on jobs and thus not estimating correctly for new potential jobs later on.
However, Veronica cannot afford to pay a bookkeeping service to visit daily or weekly to ascertain this extra specific ongoing information.
The solution I came up for Veronica was the following: A bookkeeper visits her office only monthly, normally on a Saturday (when no one else is around), to review all job folders. The stipulation here is that all job folders must have all customer deposits and all vendor payments noted on the COVER of the job folder. This is simply completed in outline form on the cover of the folder. This extra step reduces bookkeeping time it will take for the bookkeeper to dig thru the folders and ascertain the exact same information. This extra step will also reduce potential misinterpretations of information for that job.
The on-site bookkeeper then simply has to take this clearly documented information and enter it into the bookkeeping software, complete with all of the corresponding bank reconciliation work.
Then, the on-site bookkeeper has all of the information needed for that month to furnish company-wide profit & loss reports and also job-costing reports to Veronica.
Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.