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Job Costing Procedures

Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: Project Managers, Accounting, Field Supervisors

Purpose​

Establish procedures for accurate job costing to track project profitability in real-time and support financial decision-making.

Why Job Costing Matters​

Accurate Job Costing Enables:​

  • Real-time profitability visibility
  • Early problem detection
  • Accurate billing
  • Informed change order pricing
  • Better future estimates
  • WIP accuracy
  • Cash flow management

Without Job Costing:​

  • Profitability unknown until project ends
  • Problems discovered too late
  • Inaccurate billing
  • Poor estimating feedback
  • WIP unreliable

Cost Code Structure​

Standard Cost Code Hierarchy:​

Project
├── Phase/Area (optional)
│   └── Cost Code
│       └── Cost Type (Labor, Material, Sub, Equip, Other)

Sample Cost Code Structure:​

DivisionCode RangeDescription
0101-XXXGeneral Conditions
0303-XXXConcrete
0505-XXXMetals
0606-XXXWood & Plastics
0707-XXXThermal & Moisture
0808-XXXDoors & Windows
0909-XXXFinishes
2222-XXXPlumbing
2323-XXXHVAC
2626-XXXElectrical

Cost Types:​

TypeCodeDescription
LaborLDirect labor hours and cost
MaterialMMaterials purchased
SubcontractSSubcontractor costs
EquipmentEEquipment rental/owned
OtherOPermits, fees, misc

Cost Collection​

Labor Costs:​

Source: Time tracking system

Required Data:

  • Employee
  • Hours
  • Project
  • Cost code
  • Classification (for burden calculation)

Calculation:

Labor Cost = Hours × Burdened Labor Rate

Burdened Rate = Base Wage + Taxes + Insurance + Benefits

BLDR Time Integration:

  • Captures time by project/cost code
  • GPS verification
  • Automatic burden calculation
  • Daily/weekly reports

Material Costs:​

Source: Purchase orders, invoices

Required Data:

  • Vendor
  • Amount
  • Project
  • Cost code
  • Description

Process:

  1. PO created with job/cost code
  2. Material received
  3. Invoice processed
  4. Cost posted to job

Subcontractor Costs:​

Source: Subcontractor invoices/pay apps

Required Data:

  • Subcontractor
  • Amount
  • Project
  • Cost code (typically one per sub)

Process:

  1. Sub pay app received
  2. Work verified
  3. Amount approved
  4. Posted to job

Equipment Costs:​

Source: Equipment logs, rental invoices

Owned Equipment:

Daily Rate = (Depreciation + Maintenance + Insurance) ÷ Working Days

Rented Equipment:

  • Actual rental cost
  • Plus fuel if applicable

Budget vs. Actual Reporting​

Job Cost Report:​

================================================================
              JOB COST REPORT
================================================================

Project: ___________________  As of: ________________________

================================================================

| Cost Code | Description | Budget | Actual | Committed | Variance |
|-----------|-------------|--------|--------|-----------|----------|
| 03-100-L  | Concrete Labor | | | | |
| 03-100-M  | Concrete Material | | | | |
| 03-100-S  | Concrete Sub | | | | |
| ... | | | | | |
| TOTAL | | | | | |

================================================================

SUMMARY:
Budget:                    $____________________
Actual to Date:            $____________________
Committed (not yet billed):$____________________
Projected Final:           $____________________
Variance:                  $____________________

================================================================

Key Metrics:​

MetricFormulaPurpose
% Budget SpentActual ÷ BudgetTrack burn rate
Projected FinalActual + Remaining BudgetForecast completion
VarianceBudget - ProjectedOver/under budget
% CompleteActual ÷ Projected FinalWIP input

Committed Costs​

What Are Committed Costs?​

Costs obligated but not yet billed:

  • Open purchase orders
  • Subcontract remaining value
  • Equipment on rent
  • Pending invoices

Why Track Committed:​

Available Budget = Budget - Actual - Committed

Without committed costs, budget appears available when it's not.

Cost Code Analysis​

When Cost Code Over Budget:​

  1. Identify cause:

    • Quantity variance (more work than estimated)
    • Rate variance (higher cost than estimated)
    • Scope change (should be CO)

  2. Take action:

    • Adjust future work
    • Process change order
    • Update EAC

  3. Document:

    • Reason for variance
    • Corrective action
    • Impact on overall project

Cost Variance Report:​

================================================================
            COST VARIANCE ANALYSIS
================================================================

Project: ___________________  Period: ______________________

================================================================

SIGNIFICANT VARIANCES (over 5%):

Cost Code: _________________  Description: __________________

Budget: $________________    Actual: $_____________________

Variance: $______________    Variance %: _________________

Cause:
☐ Quantity (more/less work than estimated)
☐ Rate (higher/lower cost than estimated)
☐ Scope change (document CO status)
☐ Estimating error
☐ Productivity (better/worse than planned)
☐ Other: ________________________________________________

Explanation:
___________________________________________________________

Impact on Project:
___________________________________________________________

Corrective Action:
___________________________________________________________

================================================================

Daily Cost Tracking​

Field Input:​

Daily (from BLDR Pro):

  • Labor hours by cost code
  • Equipment used
  • Materials received
  • Work completed (quantities)

Office Input:​

Daily/Weekly:

  • Invoices posted
  • Subcontractor costs posted
  • Cost allocations

Reconciliation:​

Weekly:

  • Time records → Payroll → Job cost
  • Invoices → AP → Job cost
  • Cost code review

Job Cost Meetings​

Weekly PM Review:​

Agenda:

  • Review cost report
  • Discuss variances
  • Update projections
  • Identify issues
  • Plan corrective actions

Monthly Management Review:​

For Each Project:

  • Overall budget status
  • Significant variances
  • Projected final cost/margin
  • Issues and risks
  • Recovery plans

Integration with Other Systems​

Time Tracking → Job Cost:​

BLDR Time → Payroll → Job Cost System
         ↘          ↗
           Direct Integration (preferred)

Purchasing → Job Cost:​

BLDR Pro (PO) → Receiving → AP → Job Cost
              ↘              ↗
              3-Way Match

Billing → Job Cost:​

% Complete (from cost) → Pay Application → Revenue Recognition

Software Integration​

BLDR Pro:

  • Daily reports with cost codes
  • Material tracking
  • Work quantity tracking
  • Photo documentation

BLDR Time:

  • Time by project/cost code
  • Automatic burden calculation
  • GPS verification
  • Real-time labor cost
  • WIP Reporting
  • Pay Application Process
  • Purchase Order Process
  • Estimating Standards

Template provided by support.construction. Job costing is the foundation of construction financial management.