Job Costing Software for Small Contractors

Most small contractors already know their margin. They just learn it after the job closes, when there is nothing left to fix. The tools below are about moving that moment earlier, and the right one depends less on the software than on how fast costs reach it.

What job costing needs to track

Whatever you use, it has to hold the same pieces, each one tied to a job and, ideally, to a cost code or phase within it:

• The estimate. What you bid for each phase: labor hours, materials, equipment and subs. Without it there is nothing to compare against.
• Labor. Hours by person, by job and by phase, at a rate that includes taxes and benefits rather than the bare wage.
• Materials. Purchases and deliveries charged to the job they went to, not to a general supplies account.
• Equipment. Hours on owned machines and the cost of rentals.
• Subcontractors and purchase orders. Committed costs: money you have agreed to spend but haven’t been billed for yet. This is the line most systems miss.
• Change orders. Approved, priced and added to both the budget and the billing.
• Billing. What you have invoiced and collected against the job.

Put together, those give the three numbers that matter on any day of the month: cost to date by phase, what is committed but not yet billed, and the projected margin when the job finishes.

When the spreadsheet stops working

A construction job costing spreadsheet works for a while, usually while one person runs both the office and the numbers. It stops working in specific ways:

• Hours arrive a week late. Time sheets come in on paper on Friday and get typed in on Monday, so the sheet is always describing last week.
• Committed costs aren’t in it. A purchase order shows up only when the invoice does, so a job looks profitable right up until the supplier bills.
• Change orders live in email. The extra work gets done before the price is agreed, and the margin shows up after the job is done.
• Every job is its own file. Each one is a copy of the last with small changes, so nobody can see all open jobs side by side.
• Two people can’t edit at once. Whoever has the file open wins, and the other person’s numbers go into a second copy.

If two of those sound familiar, the spreadsheet is no longer a cost tool. It is a record of what already happened.

QuickBooks add-ons vs a custom app

Most small contractors start with what they already pay for. QuickBooks Online’s higher plans include project tracking, the desktop line has contractor editions with job costing, and time-tracking apps can send hours into it by job. For a contractor whose jobs are simple, that is often enough, and it keeps everything in the accounting system your bookkeeper already knows.

The limits are worth knowing before you build a process on it:

• Accounting software sees costs once they are bills or paychecks. Committed costs and work in progress are hard to show.
• Phase or cost-code detail is thin compared with how a contractor actually estimates.
• Change orders have no workflow. Somebody still has to remember to price and approve them.
• The office enters most of it, so the data is only as current as the office’s week.

A custom job costing app fills those gaps around the accounting system rather than replacing it. Estimating, job costing, change orders and field time share one database, the margin is visible while the job is running, and finished numbers flow into QuickBooks instead of being typed twice. Connecting estimating and accounting software is often possible, and the free audit is where we find out. You get the cost of connecting them in writing first.

The test is simple. If your jobs fit the way the accounting software thinks about projects, stay there and add a time app. If you are keeping a second spreadsheet beside it to see the real picture, that second spreadsheet is the case for a custom app. Our custom software for contractors page covers what that build includes.

Getting hours and materials in from the field

Job costing is only as current as its slowest input, and for most contractors that is the field. The fix is to let crews enter what they know where they know it:

• Time on the phone, picked against the job and phase, at the end of the day rather than the end of the week.
• A photo of the delivery ticket or receipt, attached to the job before it goes missing in the truck.
• Equipment hours logged against the machine and the job together.
• A short daily log of what got done, which also becomes the record when a change order is disputed.

Two rules make it stick. Entering the hours should replace the paper time sheet, not sit beside it, so field hours land in payroll without retyping. And the app has to cope with whatever reporting your trade requires. Force Electric runs crews across several states and needs time tracking that satisfies union reporting; FalconSnap, the system we built, was set up with custom programming for exactly that.

The phones, tablets and job-site laptops doing this need looking after too. IT support for contractors covers office and trailer networks, field devices and backups for plans and bids.

Moving off an Access job-cost database

Plenty of contractors outgrew the spreadsheet years ago and built a contractor job tracking database in Microsoft Access instead. It usually does the job well, on one machine in the office, until the person who built it leaves or the file starts corrupting.

Moving it does not mean starting over. The cost codes, job history and reports come across, the old file keeps running until the new system matches its numbers, and crews gain the phone entry the Access file could never offer. Our guide to what a Microsoft Access migration costs explains what sets the price, and Access migration for construction covers the systems contractors tend to run.