Are You Pricing Projects for Profit? Here’s How to Find Out
As we head into the second quarter, it’s an ideal time to sharpen your financial strategy—and one of the most powerful tools at your disposal is job costing. Pricing projects accurately is one of the biggest challenges service-based businesses face.
In this guide, we’ll show you how to apply job costing to better understand your project costs, set profitable prices, and make more informed financial decisions. Whether you're looking to improve margins or gain visibility into where your money goes, job costing is a powerful tool to help you price with confidence and grow sustainably.
💼 What Is Job Costing?
Job costing is a method of tracking all costs related to a specific project or job, including:
Direct labor — Wages paid for time worked on that specific job
Materials — Supplies purchased and used specifically for the project
Overhead allocation — Shared costs like rent, equipment, and software
By calculating these, you can determine the true profitability of each job.
🔧 Steps to Implement Job Costing
Identify Direct Costs
Track labor hours and materials used directly for each job.Allocate Indirect Costs
Apportion shared costs (utilities, software, office space) based on time or resources used.Calculate Total Job Costs
Add up all direct and indirect costs to get the full project cost.Determine Job Profitability
Subtract the job cost from the revenue earned to assess your profit margin.
💡 Benefits of Job Costing
✅ Smarter Pricing
Use historical cost data to set profitable rates for future projects.
✅ Better Budget Control
Track estimates vs. actuals to stay on budget and prevent surprises.
✅ Profit Clarity
See which jobs or services generate the highest returns—and which don’t.
🛠 Tips for Accurate Job Costing
Maintain detailed records of hours and expenses for every job.
Use technology like accounting or job costing software to streamline tracking.
Review regularly to uncover trends, identify inefficiencies, and adjust pricing.
📣 Final Thoughts
Job costing isn’t just about tracking numbers—it’s a key driver of profitability.
In upcoming newsletters, we’ll break down advanced techniques and real-world examples to help you apply job costing more effectively in your business.
👉 Need help setting up a job costing system that works for you?
Contact MJ Webb Bookkeeping today—we’re here to support your growth with clear, customized bookkeeping solutions.
📬 Ready to take control of your project profitability?
Let’s talk about job costing that fits your business.
📞 Contact MJ Webb Bookkeeping