Receipts and invoices pile up with no job on them
Job costing needs every cost on a job, and the stack of receipts is where most small companies stop.
Receipts are the stage before job costing, and fixing the stack starts with the cost codes. The CFO and the COO choose them to match the business strategy and the work. After that the accounting team codes credit card transactions and invoices to the job using those codes, and the PM approves invoices on the PM's projects, confirming each was received and the right amount was billed. That one approval is also a control against fraud.
Three moves, in order
Step 05: Software and bookkeeping alignment
Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current.
Other problems step 05 solves
Other things that go wrong
What owners ask
Organizing construction receipts?
Job costing needs every cost on a job, and the stack of receipts is where most small companies stop. Receipts are the stage before job costing, and fixing the stack starts with the cost codes. The CFO and the COO choose them to match the business strategy and the work. After that the accounting team codes credit card transactions and invoices to the job using those codes, and the PM approves invoices on the PM's projects, confirming each was received and the right amount was billed. That one approval is also a control against fraud.
Which part of the system fixes this?
The step is number 05, software and bookkeeping alignment. Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current. It's drawn from chapter 5 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% after taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Choose the cost codes first, so there is a place for every kind of cost.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 05 depends on step 01, job cost structure. Install it ahead of that and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.