jobcosting Job Costing: A Guide

This article will provide you with a comprehensive guide to Job Costing in LMN for your convenience! 

Select from the list below to jump to its spot within the article!

 

Introduction

Designed for businesses that want to make sure they’re staying as profitable as possible, LMN’s Job Costing tools let you compare all of your job-related usage – labor, materials, equipment, subcontractors, and other costs – against estimated amounts, so that you can spot variances and make smart adjustments to your estimating.

  • If you want to learn about Job Costing with Videos - please click HERE
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10.0 What is Job Costing? - LMN Academy

JOBS: View Real-Time Costing at glance with the Job Cost Overview Screen

The next time you fire up a Job in LMN, you’ll still see the Scoreboard that our contractors know and love. But you’ll also see a second, even more powerful analysis tool: the Job Costing Overview panel. At the top of the panel, you’ll be able to view critical details of your job such as:

  • Actual Revenue (vs. Estimated)
  • Net Profit and Gross Profit (vs. Estimated)
  • Total Cost of Job (vs. Estimated)

For these numbers to be as accurate as possible, you'll want to start by checking a couple of important tools:

  • At the right side of the top dashboard, you'll see an Action Items box. This will indicate whether any of the following scenarios are throwing off your job costing numbers:
    • An employee who has worked on this job is missing a wage cost applicable to the job period
    • An estimate has not been linked to the job
    • One of your work areas hasn't been mapped to a task
  • To the top right of Action Items, you'll see a 'gear' icon. Click this to access your Actual Cost settings panel. This is where you can decide whether you want the actual costs to come from either:
    • Timesheets and Vendor Bills; or,
    • Solely Vendor Bills.

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In the table underneath, you’ll see key costing details about each line item associated with the job — organized into category dropdowns for Labor, Materials, Equipment, Subs, and Other. Data fields provided for each line item include:

  • Estimated Quantity (per the proposal/estimate that was exported to create this job);
  • Actual quantity used
  • Estimated cost in dollars
  • Actual cost in dollars

If you created this job via Estimate Export, or linked it to an estimate via Action Items, the estimated numbers shown here will populate automatically based on what's in that estimate.

Actual usage and cost details can come from several different sources:

  • Timesheets submitted via the Time Mobile App (labor; materials; equipment)
  • Data from Vendor Bills inputted into LMN (materials; equipment; subs; other)
  • The Job Cost Overview’s Add Cost tool for creating manual cost entries (all categories)

Read on for more information about all three of these methods of recording costs.

10.0 Job Costing Overview Panel - LMN Academy

Bringing non-labor Line Item information from an Estimate into a Job using the Estimate Export Tool

As of the 23.01 update, LMN’s Estimate Export tool will now bring every material from your estimate over into your newly created job — including the estimated quantity and price. The transfer of this data is automatic -- no extra user action is necessary when performing the Export.

When your operations staff go to review the materials within a fresh Job, they’ll be able to pick and choose which ones they want to track usage of for job costing purposes via the Materials and Equipment view (see next section).

Bringing over the estimated quantity and price information doesn’t just apply to materials. When you open up the Job Costing Overview of a job created via Estimate Export, you’ll also see the estimated amounts for line items in the categories of Equipment, Subcontractors, and Other.

 

Managing a Job’s Usage Tracking with the Materials and Equipment panel

As a contractor, you don’t always want to track everything you estimated. In fact, there are a lot of cases wherein doing so might actually be more trouble than it’s worth — yielding data that is too granular for you to act on.

Within a job, the Materials and Equipment view is where you can specify which items will and won't be tracked via Timesheets. For each item you decide to track, you'll also have the option of tracking quantities that were used on each visit. 

If you created the job via Estimate Export, this screen is where you’ll see the list of line items that automatically had their details brought over. (Note: Labor line items won't appear on this page -- you will only those within the categories of Materials, Equipment, Subcontractors, and Other.)

If you’re creating the Job from scratch, or adding something that your estimators didn’t include, you can click the green “+” button to add an item in one of three ways:

  • By searching for it in your Price List (all four categories are available)
  • By importing it from another job (you’ll have the option of bringing Task, Rate/Price, and Service information along with it)
  • By searching for it among the Default Materials you’ve already added into LMN Time via Settings > Jobs > Materials.

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10.9 Materials and Equipment Tab - LMN Academy

Vendor Bill Management within LMN

In many situations, vendor bills/receipts are your best source of truth with regards to the costs incurred on a job. Now, for the first time, you can add a digital record of a vendor bill into your LMN system, then allocate the various purchased items to different LMN jobs, line items, and categories. The allocated bill will then populate the relevant Job Costing Overview screens with accurate actual cost figures.

There are two different ways to see a list of Vendor Bills and add new ones:

  • When looking at an individual job, click the Vendor Bills tab in the job's menu. This will bring up a list of Vendor Bills that have items allocated to that job.
  • Under LMN's Jobs submenu, you'll also find a Vendor Bills menu item. Click this to bring up a general list of your Vendor Bills that have been allocated to any jobs.

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From either page, you can click the green '+' button (found at bottom right) to add a fresh Vendor Bill. Clicking this button will open a form that allows you to input all the crucial information you need to analyze jobs properly:

  • First, assign each bill to an actual vendor from your CRM, or create a new one on this screen. For contractors who like to be thorough about their record keeping, we’ll also let you input bill-specific details like the reference number, PO number, date, and due date.
  • Next, add a digital line item for each item found on the bill/receipt. Here you’ll also be able to specify whether or not each item is taxable.
  • After entering in your line items, click the 'Allocate' button to proceed to the third step. Here, you’ll be able to allocate each line item to an LMN Time job, as well as a category or specific item within that job. After you've finished an allocation, a readout will show you how many units you still have left to allocate in order to fulfill what was estimated.

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When Vendor Bill line items have been allocated to a line item or category within a Job, you can see a summary of that bill's info by clicking into the item's information panel then clicking the 'Vendor Bills' tab.

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10.6 Vendor Bills - LMN Academy

Manage each staff member’s Hourly Cost in Wages

In order to accurately job-cost labor items, it's important to have a record of what each field staff’s time costs the company on a per-hour basis.

Within the Staff screen, you can designate wage costs for an employee by pulling them up and clicking on the 'Wage Cost' tab. You will be prompted for the following:

  • Hourly cost of the employee
  • Labour Burden percentage
    • The Wage Cost Calculator lets you select a budget to apply to this employee; doing so will fill in the labor burden percentage automatically (but will not populate any of the other fields).
  • Average weekly overtime on a job, and the multiplier your company applies to compensation for that overtime
  • Payroll code (see below)

You will also notice that the Wage Costs tab lets you set multiple wage costs for each employee. We designed it this way so that you can:

  • Set historic wage costs for each staff member (which will come in handy if, for example, they recently received a raise). This employee's contribution to a job will be costed at the wage cost that covers the period during which the job took place.
  • Set up different wage costs for different payroll codes. This is a great way to handle situations where, for e.g., the same employee earns a different hourly wage for snow removal during the winter than they do for masonry work in the summer.

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10.3 Wage Costs - LMN Academy

Add a Cost in Any Category via Manual Entry

Sometimes, to be accurate with your costing, you’ll need to record a cost that didn’t come in via timesheets or vendor bills. You can do so by opening up any work area within the Job Cost Overview, and clicking on the “Add Cost” button:

 

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When adding a cost via this method, you’ll be asked to fill in some basic information fields (depending on the category) that will be needed in order to calculate your costing. If you'd like, you can also add a note providing further explanation, or a description of the adjustment:

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10.10 Manual Adjustment - LMN Academy

Restrict Staff access to Job Costing details

You may not want all of your employees being able to access Vendor Bills or the Job Cost Overview. In the Edit Staff modal under the Permissions tab, you’ll be able to specify a staff member’s access to Job Costing (no access; read-only access; or full access).

 

If you require further assistance, please contact our Support Team via email at support@golmn.com or reach out to us through our Live Chats feature or by Phone: (888) 347-9864! 

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