job cost software

You may need more than just Job Cost Software

Job cost software and job cost accounting software is typically used by manufacturing companies.  This is because Job Costing is a method of cost accounting by which the total cost of a given unit or quantity is determined by computing the costs that go into making a product as it moves through the manufacturing process.

Are you Building or Manufacturing?

Manufacturing systems would provide a job cost module with details of the bill of materials required to make the product and the time required in specific cost centres so it could be loaded with the cost of labour or the machines.

The basis for manufacture can vary from forecasts with repetitive jobs for example the manufacture of consumer products (e.g. TV sets); Cumes (blanket sales orders) & Releases for engine parts in the motor industry; make-to-order e.g. customised boats; and Jobbing where each job has different material and labour requirements.

It is this last class of manufacture, where the job is based on an estimated of labour and materials, that has led to some businesses in the project industries believing that a Job Costing System will suffice for their accounting needs.

Where Job Cost Software Fails

For simple projects, Job Cost Software may suffice. However Job Cost Software will show its limitations:

  • when the Job (or project) extends into 1 or more years
  • the cost and time implications of risks need to be included
  • the scope of works is varied and hence the original estimate changes regularly
  • there is a need for progress payments or the job or project involves an advance payment
  • subcontractors need to be engaged with legally binding contracts covering their scope of work

In these cases, companies find they need a software solution with additional functionality so they turn away from simple job cost software and look to purpose built project accounting software or construction accounting software.

To get a greater understanding of how Muli could suit you better than general Job Cost Software, select MODULES from the top menu and examine PROJECT BUDGETS & VARIATIONS

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