Job costing
Job costing software for manufacturers
Find out what each job actually cost in labour, material and machine time, compare it against what you quoted, and stop discovering your loss-making products at the year end.
Definition
What is job costing software?
Job costing software builds the true cost of an individual job from what it really consumed: the hours operators booked against it, the material issued to it, the machine time it used and the overhead applied to it.
The important word is actual. Almost every manufacturer has an estimated cost, because they quoted the work. Far fewer have the actual cost, which is the only one that tells you whether the quote was any good.
The uncomfortable pattern is consistent across UK manufacturers: a handful of products and customers are considerably more profitable than anyone assumed, and a handful are losing money on every order. Without job costing you are cross-subsidising and cannot see which way.
See it live
Actual against estimate, while the job runs
Every booking adds labour to the job, every issue adds material, and the comparison against the quote is live. No month-end reconstruction, no research project.
A job drifting over its estimate is visible mid-flight, while there is still something you can do about it.
- Cost building live on every open job
- Labour, material and machine streams separated
- Variance against quote per operation
How it works
How job costing works
Four cost streams, collected against the works order, compared against what you said it would be.
Labour
Hours booked by operators against each operation, at the rate for that person or work centre. This is the stream most factories estimate rather than measure.
Material
What was actually issued to the job, at real purchase cost, including the material scrapped and replaced rather than just the theoretical BOM quantity.
Machine and overhead
Machine hours at their running rate, plus the overhead recovery your business applies. Getting the rate roughly right matters more than getting it perfect.
Compared to quote
The finished actual cost set against the estimate, so the variance is visible per job, per product and per customer.
Capabilities
What job costing gives you
Actual versus quoted
Per job, with the variance broken down by labour, material and machine.
Cost by product
Which items consistently cost more to make than you charge for them.
Cost by customer
The accounts that look busy and turn out to be barely worth running.
Cost of scrap
Rework and scrap valued properly instead of disappearing into overhead.
Live work in progress
What has been spent on jobs still open, rather than a month-end estimate.
Better estimating
Historic actuals feeding the next quote instead of the last guess.
The bigger picture
Margin by order, product and customer
Roll the job costs up and the pattern appears: which products earn, which customers cost, and where the quiet cross-subsidy has been happening.
This is the report our customers most often say paid for the system - usually inside the first quarter.
- Margin per sales order
- Product and customer profitability ranked
- Export straight to your accountant
Benefits
What job costing is worth
This is normally the fastest financial return in a manufacturing system, because it changes pricing decisions rather than just efficiency.
Quoting stops being folklore
Estimates built on what similar jobs really cost beat estimates built on what somebody remembers. The improvement compounds with every job you quote.
You can walk away from bad work
Knowing a product loses money on every order gives you the option to reprice it or decline it. Most manufacturers find at least one.
Overtime gets attributed
When premium hours land on a specific job, you can see which work is quietly consuming your most expensive capacity.
WIP stops being a guess
Live job costs mean work in progress on the balance sheet reflects reality rather than an accrual somebody sense-checked.
Costing methods
Job costing, process costing and standard costing
Which one applies depends on what you make. Manufacturers who make discrete, varied items almost always need job costing.
| Job costing | Standard and process costing | |
|---|---|---|
| Costs are collected against | An individual job or works order | A period, a process or a standard unit |
| Best suited to | Make-to-order, high-mix, bespoke work | Repetitive, high-volume or continuous production |
| Tells you | Whether this specific job made money | Whether the process is running to plan |
| Requires | Booking at operation level | Accurate standards and volumes |
| Variance shown as | Actual versus quoted per job | Actual versus standard per period |
| Typical users | Job shops, engineering, bespoke manufacturers | Food, chemicals, continuous process plants |
Right for you?
When you need job costing
If you make different things for different customers, you almost certainly need this and probably do not have it.
- You quote from experience and have no reliable way to check the quote afterwards.
- Margins are known at company level but not at product or job level.
- Job cost is worked out manually, weeks later, and only for jobs somebody was worried about.
- You suspect certain customers or products are unprofitable but cannot prove it.
- Overtime and rework are absorbed into overhead rather than attributed to the job that caused them.
- Work in progress on the balance sheet is an estimate nobody fully trusts.
DynamxMFG
Costing that builds itself as the job runs
Job costing done retrospectively is a research project. Somebody collects route cards, interprets handwriting, estimates the gaps and produces a number weeks after anyone could act on it, which is why most factories only do it for jobs that already went wrong.
DynamxMFG builds cost continuously from bookings. Labour lands as operators book operations, material lands as it is issued, and the job carries its own running cost. By the time it closes, the actual versus quoted comparison already exists.
Built from real bookings
Hours and material from the floor, not estimates. See shop floor data capture.
Live while the job runs
See the cost building before the job closes, not after. See manufacturing intelligence.
Feeds your accounts
Finished figures pass to Sage, Xero or QuickBooks. See integrations.
Integrations
Connects to what you already run
Job costs belong in your accounts as well as on the floor. DynamxMFG passes finished job figures to Sage, Xero and QuickBooks, so the ledger and the factory finally agree.
See all 33 integrations →
Customers
What manufacturers say about DynamxMFG
“DynamxMFG is an excellent choice for manufacturers looking to digitise operations without being overwhelmed by complexity.”
“As GMC has grown, it had become harder for me to have such a keen view on components to see if those parts were profitable or not. DynamxMFG enabled us to monitor the machine time and see whether we are making a profit or a loss on each component.”
“The ability to dynamically modify BOMs after release, adding or removing items from work orders, scrapping and reworking parts, has been the single biggest improvement for our business.”
“We chose the system over competitors because of its ease of use, strong customer support and friendly delivery team. So far, everything has matched what was promised.”
“With DynamxMFG, all our production processes are tracked and the relevant data is captured. This increases our control over the business and helps us identify more opportunities to enhance efficiency and quality.”
“Our experience has been positive, and it was definitely worth switching. The support we have received has been extremely helpful. My favourite feature is the integration and automation capabilities.”
Questions
Job costing questions, answered
Can I do job costing in my accounts package?
Accounts packages can hold a job cost, but they cannot collect it. The labour and machine time has to come from the shop floor, and that is the part Sage, Xero and QuickBooks do not do.
What labour rate should I use?
Most manufacturers use a work centre rate covering wages, on-costs and an overhead recovery, rather than individual salaries. Being consistent matters more than being precise.
How do I handle overheads?
Usually as a recovery rate per machine or labour hour. It will never be perfect. A roughly right overhead applied consistently is far more useful than an exact one applied once a year.
Should scrap be costed to the job?
Yes. Scrap absorbed into general overhead hides which products and processes are actually causing it, and those are the ones worth fixing.
How soon will we see useful numbers?
As soon as the floor is booking reliably, usually within weeks. The first month tends to produce at least one genuinely surprising result.
Does this work for long-running jobs?
Yes, and it matters more there. Jobs running over weeks or months accumulate cost invisibly, and a live figure lets you intervene while the job is still open.
Find out what your jobs really cost
Book a 30 minute call and we will show actual against quoted on real jobs, then you can decide what that would tell you about yours.
