Job Costing Profitability
Measuring profitability is crucial for business growth. Job costing in Housecall Pro makes it easier than ever to track and report on the costs associated with each job - giving you the power to make decisions that are right for your business.
Through a powerful suite of solutions, tracking expenses and profits for each job is simple.
Setting Up Job Costing
To start using job costing, click into your Settings (gear icon), navigate to the Job details settings page in the left menu, and click on the Job Costing tab.
From here, ensure the Show job costing breakdown is toggled on which will expose job costing calculations on your jobs is enabled.
Tracking Costs
To get the most out of job costing you'll want to track the following inputs on jobs:
Labor Costs
Time tracking
To track labor costs, first make sure your employees are tracking their travel and time on jobs through our time-tracking feature. You can toggle on this setting from the Job costing settings page.
Learn more about time tracking here.
Fully loaded rates
Next, in order to calculate actual labor costs employee pay details will need to be configured so that a fully loaded rate can be multiplied by the time on the job. A fully loaded rate includes the base hourly rate of an employee + any additional employer-paid costs.
To set up fully loaded rates, select the blue edit pencil from the job costing settings page next to Labor costs. From here, edit each employee to enter their pay details. You'll first want to enter their base hourly rate which can be entered directly for hourly employees or calculated automatically for salaried employees. Then add in an additional dollar amount or % markup to account for additional employer-paid costs such as taxes, insurance, benefits..etc. If you don't know what the additional cost is, you can use our calculator.
ℹ️ Note that all admins can see and edit labor rates, but office staff will need the "View and edit pay details" permission enabled to do so.
Once you have fully loaded rates assigned to your employees and they track their time on the jobs they're assigned to, their fully loaded rate will be multiplied by the time spent on the job (travel to and time on the job site) to calculate actual labor costs.
Material Costs
Material Line Items
Materials costs are another important cost category to stay on top of. Having your price book built out with the common material you use will make it easier to track the material going into your jobs.
Learn more about setting up your price book here.
To track material costs, add material line items to your jobs and ensure the unit cost field, which is the cost of the material to you (not your customer) is filled out.
If you don't want your customers to see materials line items, simply hide them from the invoice settings.
Learn more about invoice settings here.
Material Job Inputs
If you want to track materials outside of line items in a way that doesn't impact the price of your job you can do so by enabling the Material job inputs setting. This is likely how you'll want to track materials if you're using flat-rate pricing.
When this setting is enabled, you'll see a Job Inputs card on the job details page on web and mobile where material items can be added. These materials will not show up on the invoice or impact the price of the job.
You can also auto-populate material job inputs when flat-rate services that have materials added to them are added to a job.
To auto-populate flat rate materials, navigate to your flat service in the price book. Once materials are added to a service, enable the Track materials on job setting. Once enabled, the materials will automatically show up in the job inputs section of the job when the service is added to the job.
Alternatively, you can also enable/disable this setting for all flat-rate services by checking the setting below the Material job inputs toggle on the job costing settings page.
Miscellaneous Costs
Jobs may incur costs that don't fall into labor or materials, such as permits, parking, and rental fees to name a few. If you'd like to track these costs separately from line items you can enable the Miscellaneous job inputs setting.
Once this setting is on, you'll be able to track miscellaneous costs on jobs from both the web and mobile apps. These costs won't impact the invoice or price of the job.
Commissions and Upsells
If you have a performance pay structure for your employees, you can turn on tracking for commissions costs which will enable you to assign commission rates to your employees.
Once you've turned on commissions and added commission rates, you'll be able to assign commissionable line items to employees on jobs. Commissions will be calculated by multiplying the commissionable amount of line items by the assigned employee's commission rate.
You can also track upsells on jobs by updating the 'Sold By' field on line items.
Services
You can use the unit cost field on service line items to track service costs as well, although tracking the actual costs of labor, materials, misc costs, and commissions will give you a more accurate breakdown of your job costs and margins. Scroll down to the next section to learn about how service costs can be tracked as expected vs actual job costs.
Expected vs Actual Costs
When you price your services you may be incorporating what you anticipate the labor, materials, and other costs to be in order to price the service in a way that results in a profit. This is especially relevant if you use flat-rate pricing.
Learn more about flat rate pricing here.
If you'd like to report on expected vs actual job costs to stay on top of your margins and adjust pricing as needed you can do so by enabling the Show expected job costs setting from the job costing settings page. Note that this setting is automatically enabled for any pros who have their flat rate price book enabled.
When the Show expected job costs setting is enabled, the unit cost of any service line item on a job will be treated as an expected cost and will be shown under the expected costs section of the job costing breakdown card from the job details page.
Material line items or inputs, miscellaneous inputs, commissions, and labor tracked on the job from time tracking will be calculated as actual job costs and will be shown in the top section.
If your flat rate services are setup in your price book with material and labor costs, those costs will populate automatically under expected labor and material costs. You can also manually input or edit these values on the job if needed which will update the total expected job cost.
Reporting on Job Costs and Profit Margins
As you track revenue and costs on your jobs, you'll be able to analyze your job costs and profit margins from the job details page and in job reports.
The following metrics are available by expanding the Job Costing Breakdown section on the job details page.
Profit Margin = gross profit/revenue
Total Revenue = the job subtotal minus any discounts
Total Job Costs = labor costs (travel + time on job x fully loaded rate of any assigned employees) + material costs + commissions costs + miscellaneous costs + service costs
Total Gross Profit = revenue - job costs
Note: taxes and tips are excluded in all of the above metrics
If you're tracking expected vs actual job costs, you'll be able to report on expected margins, profits, and costs vs actuals as well.
A job costing summary is also available on jobs on the mobile app by default for admins and office staff.
Aggregate job costing reporting is also available on the jobs tabs in reporting. To view the aggregate reports, navigate to Reporting > Jobs. For details on the job costing reports, reference the Job costing reporting article.
Job Costing Reporting
If you're using our Job Costing feature, you can track costs and profitability across jobs in reporting.
In order to report and track job profitability, you'll need to be using our job costing feature. To turn on this feature you will first need to head to your settings by selecting the gear icon in the top right corner of your navigation bar.
You would then press 'Jobs' on the left sidebar and then 'Job costing' from the drowndown menu.
You may then toggle on the job costing settings.
Once settings are turned on, you can start inputting any costs associated with the job on the job page itself.
Running the report
After turning on the job costing setting, your job costing reports will be added to the jobs page within reporting.
Select the reporting tab, located at the top of your HCP in your navigation bar.
You should now see the Job Costing card on your reporting page.
Click into any of the reports to view your costs and profitability across jobs.
Understanding the reports
How metrics are calculated in the reports:
Job revenue: job subtotal minus discounts (excludes taxes and tips)
Labor cost: sum of labor cost. (when viewing by employee, only shows costs associated with that employee)
Commission cost: sum of commission cost (when viewing by employee, only shows costs associated with that employee)
Material cost: sum of material cost
Miscellaneous cost: sum of miscellaneous cost
Total cost: sum of labor, material, commission and miscellaneous cost (includes all labor and commissions costs when viewing by employee)
Gross profit: job revenue minus labor, material, commission and miscellaneous cost
Profit margin: gross profit divided by job revenue
Using the reports:
The reports have the full functionality of our jobs reports, including the ability to customize, drill down and save a custom version of the report.
Apply filters
Apply filters by clicking on the blue 'MANAGE FILTERS' button located at the bottom left of the report graph.
Adjust the group by and metrics
Customize the metrics in the data table by using the blue 'EDIT COLUMNS' button located at the bottom right of the report graph. Once in the edit columns menu, you can select or unselect metrics to see in the table.
You can change how the data is summarized (by date, employee or lead source) by using the “group by” drop-down selector in the edit columns menu.
Permissions
Admins and office staff will be able to see job costing information on each job by default. If you'd like your field techs to see job costing details on their jobs you can turn on the ‘See job costing margins and inputs’ permission from the employee details page. You can also turn off this same permission for your office staff.
Learn more about permissions.
Estimates
When job costing is on, you'll also be able to track basic unit costs on service and material line items along with the expected profit margin on estimates.
Want an in-app walkthrough of these new features? Click here!
Uploading new Price book items via Excel or CSV file
If you are uploading Price book items through an excel or csv file, you must enter the cost info into a column titled cost. Using our template? We made it easy by including a column for Cost already. You just need to enter the cost before uploading or sending to our team for upload.
Need the template?
Click on the blue "this template" link in Import and export services within the Price book settings.
After you have downloaded and filled out the template, click on the blue Upload File link to upload the file to your Price book.
Edit Job Costing From an Invoice
Learn how to edit job costing for line items directly from an Invoice.
Starting from the Job details page you will see a box titled Unit Cost under each line item and directly to the right of the Description box on the invoice. This box will pull from the Cost field within your Price book. You can click into this box to change or enter a Unit Cost.
If you want to update the cost for this item in your price list, click into the Unit Cost box and on the clock icon with an arrow.
Next you will see a pop-up window for editing the price list item.
In the pop-up window you will be able to enter the new unit cost as well as new unit price. Since you are updating a price list item you will have an option to turn on or off if this item is taxable by clicking on the Taxable toggle. Once done, press Save and the update will push to your price list.
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