Maximize Project Profitability with Real-Time Job Costing

Profitability is a key aspect in project management, especially when the project is being carried out on a contract basis. The profitability of a project can be affected by the cost of the various elements that are involved in a project, such as labor. 

Labor is the most expensive among the many elements that are involved, and it is difficult to quantify and monitor. Having software to monitor labor costs can assist you to know whether the labor is being used efficiently and what needs to be done to improve the productivity of the team. 

During the project initiation phase, the issue of costing is given a lot of attention. All the costs are included in the project budget and you must ensure that the actual cost during the implementation of the project remains within the budgeted limits. When the costs go beyond what has been budgeted, the project can run into losses. 

Many projects run on small profit margins and an increase in the cost can lead to losses. Cost management is an important aspect of project management as it can mean the difference between making profits and running into losses. There are many ways through which you can monitor costs in a project. Traditionally, costs have been managed using manual methods. However, there are modern approaches that entails the use of software to monitor and manage costs in a project. Top of these is the Crows Nest labor collection mobile app which is compatible with your PC, IOS, and android devices.

Features of a Good Real-Time Job Costing Software

Timeclock

The software should have a feature that makes it possible to capture time labor consumption related to each project.

Projects

Important information relating to the project such as files, contacts, and photos should be viewed remotely. All the information in this software is entered online and therefore it should be accessible at any place. 

Inventory

It should be possible to track changes in the inventory using the software. 

Purchasing

You should be in a position to create purchase orders even when you are remotely located. So, why should you abandon your traditional job costing method and opt for a real-time job costing app?

The traditional methods of managing costs are tedious and take a lot of time to get a real picture of how the project is performing. In the traditional approach, data is recorded on hard copies which pose a risk as some of the records can get lost. In addition, it may become difficult to consolidate the data when recorded on multiple hard copies. As such, it becomes difficult to make any analysis when it is needed. 

Data must be entered manually in the specified forms which takes a lot of time. In some cases, the same data may be required in different offices which means that several copies will have to be filled out. The many copies being generated increases the chances of making errors leading to confusion and wrong inferences being made. 

Benefits of Real-Rime Job Costing 

Labor collection mobile apps are designed to address the shortcomings associated with the traditional methods of job costing. 

Minimize Risk and Maximize Growth

For you, real-time data is important as it helps in making immediate decisions. When the information is real-time, you will be in a position to know whether your project is going according to the plan or not. For example, you will be able to know whether the costs are per the provisions in the budget. In case the costs are higher than the provisions in the budget, you will have time to take corrective actions and bring them down. 

For traditional job costing methods, real-time data can’t be extracted. As such, you will not be able to know when the job costs are higher than the budgeted amount. The project will, therefore, run into losses due to the inability of the project manager to take action on time to rectify a trend. By the time you realize that the costs are beyond the allocated amount, it might be too late for any corrective action to be taken and the project will have run into losses. 

Provide More Accurate Estimates 

It just can’t get better! You want real-time updates about your labor force. I mean any lag period will delay decision making which can be detrimental to your project completion and profit maximization. Data that is entered into the job costing software can be accessed by any person of interest immediately after the data has been entered. For example, if the data is entered by the field officer, you can be able to access the same data in the comfort of your office. This enables you to analyze the data and take any action that may be required. In this way, the real-time data enables you to make instant decisions that will address immediate problems relating to costing. 

Allocate Costs Correctly to Hit Target Profits

The job costing software requires data to be entered only once after which it is available to all who may need it. The method helps in saving time and resources that would have been used if the data was to be delivered manually as is the case with traditional methods where data is physically entered and delivered to the offices. Even after these forms get to the office, it takes a lot of time before the data can be analyzed. The time taken can compromise the management of the project since the decisions made may be too late. 

Take Away

Job costing is an integral part of project management without which huge losses can be realized. Most projects run on slim profit margins hence the need to keep costs under control to protect the profits. 

One of the ways through which this objective can be achieved is by using real-time job costing. This type of job costing uses software, making it possible for the data to be available to all the users on a real-time basis. 

The advantage of real-time job costing is that it enables you to make decisions quickly and apply them to address an identified issue. To enhance the chances of success in your project, it is good to work with experts who will guide you through the process of real-time job costing.