Which of Your Jobs Actually Make Money? Job Costing for Trades

Last month was your busiest yet. The diary was full, you worked two Saturdays, and the invoices added up to more than any month before. Then you looked at the bank balance, and it didn't feel like your best month at all.

That gap has a cause, and it's usually not one bad job. It's a handful of jobs that each made a bit less than you thought, for reasons that never showed up on the invoice. Job costing is simply the habit of comparing what a job was supposed to cost with what it actually cost. Below: where the money usually goes, a worked example, a five-job check you can do this week with pen and paper, and what job costing in software should show you.

Where margin leaks away

On most trade jobs, the leaks come from three places.

Time you didn't bill. The quote covered six hours on site. It didn't cover the drive to the merchant for a missing fitting, or the return visit to finish off. That time is still yours, and it still cost you a day's earning potential.

Materials that slipped through. A part bought on the day and never added to the invoice. Materials charged at cost with nothing added for collecting, storing and guaranteeing them. Offcuts and waste that nobody priced in.

Variations agreed on site. The customer asked for "one more socket while you're here". You said yes, did it, and forgot it by the time you invoiced.

None of these feel like much on the day. Together, they're the difference between a busy month and a profitable one.

A worked example

Here's one hypothetical job, with round numbers chosen to show the arithmetic. They're not typical figures for any trade.

You quote £480. You expect six hours of labour and £120 of materials. To cost the job, you use an internal labour cost of £30 an hour. That isn't your charge-out rate. It's what an hour of labour actually costs the business.

The invoice was the same £480 either way. The customer was happy either way. But the job you thought made £180 made £45, and nothing in your invoicing would have told you.

Now imagine that was your most common job type. That's the moment job costing earns its keep: not as a report, but as the evidence that one kind of job needs quoting differently.

Start with pen and paper, this week

You don't need software to find out whether this is happening to you. Take your last five finished jobs and, for each one, write down:

1. What you quoted, and the hours and materials you expected.
2. The hours actually spent, including travel, return visits and trips to the merchant.
3. What the materials actually cost, including anything bought on the day.
4. Any extra work agreed on site, and whether it made it onto the invoice.

If the numbers line up, good. If two or three jobs look like the example above, you've found your leak, and you know which job types to look at first.

The bit people forget: overhead

Labour and materials are the visible costs. There's a third that rarely makes it onto the page: the cost of running the business itself, such as insurance, tools, phone, vehicle and software. Think of it as overhead: a share of those running costs, spread across your jobs as an hourly rate, alongside direct labour and materials.

You don't need to be exact. Even a rough hourly allowance, added to your internal labour cost, makes the small jobs look more honest. A job that clears its labour and materials but nothing else has not really paid for itself.

The part software can't do for you

Job costing in software works from what's recorded against the job. Housecall Pro's job costing page describes labour from tracked time, materials from the price book and other job expenses, shown together with revenue, cost and margin.^[1]

That kind of report has one condition, and it matters more than the report: the actuals have to get recorded while the job is happening. Hours clocked to the job, receipts attached to the job, variations added to the job. A report built on half-logged hours isn't a report. It's a guess with a chart.

So the feature that matters most isn't the dashboard. It's how easy the app makes logging time and materials on a phone, in a van, at the end of a long day.

Test that in any trial. Clock in and out of a job, photograph a receipt against it, add a variation, then look at the job's profit. If any step is fiddly, it won't get done on a busy Friday. And whichever product you try, ask the vendor in writing which plan includes job costing, because that is theirs to confirm.

What to do with what you find

Job costing only pays off if it changes something. The most common changes are these:

• Quote the job type differently. If return visits keep happening on one kind of job, price one in, or change how you survey it.
• Mark up materials. Charging materials at cost means your time buying, collecting and guaranteeing them is free.
• Write down variations as they happen. Add them to the job on your phone before you pick up the tool, not at invoicing time.
• Charge for travel honestly. If some areas always cost you an extra hour, price them that way.

The first of those feeds straight into your next quote. Our guide to writing quotes that win jobs picks up from there, and our invoicing guide covers making sure agreed variations actually get billed.