The right type of job costing software can offer an efficient way for you to calculate overhead, labor, and materials before you even begin producing a product or embarking on a project.
Having the information about your manufacturing costs at your fingertips can help you evaluate profitability and decide whether or not the job is even worth pursuing. What’s more, job costing can offer several unique benefits that help it stand out from process costing.
To better understand why your business should implement job costing software, we’ve put together seven ways your business will benefit.
7 Advantages of Job Costing Software for Businesses
1. Determining Performance
An effective job costing software setup will help you assess how well your staff members are performing. Unlike process costing, job costing will present enough information to help you accurately evaluate each employee’s performance data when it comes to productivity, efficiency, and cost control.
2. Determining Profit
Integrating costing software lets you allocate costs to each of your operations and then clearly gauge the profit margin for each job. By doing this, you can determine which operations are more profitable for certain products or projects.
3. Seeking Clarity
A job costing system will allow you to easily view the expenses incurred for each job, including manufacturing processes. The software will also allow you the opportunity to review each cost and identify what is included. This is a great way to understand why each cost occurred so you can design strategies to better control costs going forward.
4. Determining Accuracy
A good system will produce accurate reports and information. Based on certain criteria for your business, the system will be able to direct different cost types into their relevant accounts. For instance, job costing will group marketing and selling costs into one group automatically. These are typically recurring expenses that can be placed into a different account from expenses that should be put into an overhead account.
5. Almost Absolute Certainty
Job costing software will help you calculate indirect costs too, such as manufacturing overheads. If you attempt to estimate such costs without an advanced costing system, you’ll soon realize how challenging it can be. A good system will help track each item that is involved with the expense of manufacturing overheads.
6. Consistent Monitoring
A good software system will let you monitor the entire production process, in real time. You’ll have plenty of opportunity to identify potential risks and issues and then make changes to avoid unfavorable outcomes, such as producing defective products or going over budget.
7. Scalability to Your Needs
It’s easy to set up business software to deliver a scalable solution to work with your different processes. Whether you want to use the software to manage complex manufacturing operations or simpler tasks, most modern software will scale to the needs of your business.
If you would like to find out more about how job costing software will help your business increase profitability while managing costs, talk to our team at Cougar Mountain Software today. They can provide information about solutions for small business accounting software and can guide you through selection, installation, and training.
Call (800) 388-3038 to speak with a business and accounting expert.