How to improve data collection when job costing
What are the main reasons for getting job costing software? High on the list are always project visibility and up-to-date information on which to make decisions.
For both, you need data you can trust. There are three main types of data collection to consider:
Project data collection
Each project or job has a unique identity and therefore when any team member records anything related to it, the system tracks it. The data needs only be entered once, as it automatically links to the rest of the system.
Such data leads to powerful answers. How is the project doing compared with the earlier estimate or quote? What are the key milestones? What hours have been logged to it so far? What expenses? Is it currently likely to make a profit? Are there any current concerns or alerts? Is it over- or under-resourced?
Client data collection
Client data is part of the same system-wide set of information, delivering further answers. What are the client contact details? What has been communicated to the client so far? What estimates have been sent? What invoices? What have they signed off for so far? Comprehensive job costing involves both project and client information at every step of the journey.
Team data collection
Each team member involved with the project will be entering their time and expenses. The best job costing software makes data entry as easy as possible because of intelligent real-time checks and user prompts plus easy online entry via Windows, Mac, web browser, iPhone or Android, so users can enter the details wherever they are while it’s fresh in their minds.
It leads to a wealth of information. How many hours have they allocated to the project so far? What grade level is the person doing the work? Which team are they in? What deadlines are they working to? Are they on schedule? What hours are non-billable? Is the level of non-billable hours to be expected, or does it ring alarm bells? Is there a problem there? Is more training needed?
All the data pulled together
Having all of the above linked together in one live system lifts the software from mere job costing to powerful business management, with three big payoffs in particular:
Inefficiencies stand out a mile when everything is pulled together. Why is this job overrunning or overspending when others aren’t? Why are key people not being utilised when other areas are overstretched? What’s needed, when, where, to get back on track?
2. Client service
Clients demand more and more of you. Accurate information and increased transparency are clearly minimum requirements. With the right data you can quickly inform clients as soon as things start to go off track, or show them how much progress and commitment you are making to their project to date, plus you can quickly retrieve copy estimates, approvals and invoices the moment the client asks.
3. Decision-making for profitability
Driving a project-led business such as a creative agency or a consultative service company is complex and needs more than simple job costing. When everything is pulled together, it informs your key decisions. Which type of project is the most smooth-running for you? Why is that? Which client is the most profitable? Which client type? Which type of team? This intelligence informs your decisions on steering the operation forward.
Note that not all job costing software systems are the same. At one end of the spectrum are simple plug-and-play project-tracking packages. They are inexpensive and they do a job, but they don’t integrate well into what the rest of your business is doing. They therefore deliver data of limited value. In contrast, joined-up data helps deliver you a competitive edge.