Job Costing
Tracking all costs associated with a specific construction project, job, or contract.
Definition
Job costing is the accounting method used in construction to allocate direct costs (materials, labor, subcontractors) and indirect costs (overhead) to individual projects or jobs. Each cost is assigned a job number, phase, and cost code to track profitability and budget performance at the project level.
Why It Matters
Accurate job costing determines whether projects are profitable. Miscoded invoices can mask cost overruns on one project while inflating costs on another, making job-level financial analysis unreliable.
Examples
Subcontractor invoice coding
A plumbing subcontractor invoice for $25,000 is coded to Job 2024-103, Phase 3 (Rough-In), Cost Code 22-100 (Plumbing).
Overhead allocation
Monthly equipment rental of $5,000 is split across three active jobs based on usage days.
How Aequo AP Helps
Aequo Build codes subcontractor and supplier invoice lines to job, phase, cost code, and cost type, and counts subcontracts, purchase orders, and approved change orders as committed cost.
Start Free TrialFrequently Asked Questions
What is the difference between job costing and process costing?
Job costing tracks costs per project or job. Process costing averages costs across identical units by department or process. Construction uses job costing; continuous manufacturing often uses process costing.
Why is accurate job coding important?
It determines project profitability, informs bidding on future jobs, identifies cost overruns early, and satisfies owner and auditor reporting requirements.
Category
constructionDeep Dive Guides
Construction Job Costing
Construction AP workflow and product guidance.
Job Costing
Track AP costs by job and cost code. Compare budget to actuals, catch overruns early, and keep projects profitable.
job costing vs process costing
Construction AP workflow and product guidance.
quickbooks online job costing
Construction AP workflow and product guidance.
Construction Accounts Payable: The Complete Operations Guide
How construction AP actually works — the invoice lifecycle from receipt to coded posting, the roles involved, the exception taxonomy, and the metrics that tell you whether the function is healthy.
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See how Aequo AP can transform your accounts payable process.