Construction Job Costing Software

5 Ways to Improve Profits with Construction Job Costing Software

In today’s construction business, there are two types of contractors: those using construction job costing software to provide more accurate estimates, understand the intricacies of each project, and maximize profits, and those going out of business. In a highly competitive global market valued at over $10 trillion, most firms operate at razor-thin profit margins and combined with the practical difficulties of increasing productivity; it’s becoming more and more difficult to establish a competitive edge.


Construction job costing software is now compulsory for contractors that want to increase profits, provide better customer service, reduce risks, and gain the business insights needed to achieve real business growth. This article details the most important ways that job costing software will help you boost your profits, stay competitive, and grow your contracting business.


Provide More Accurate Estimates with Job Costing

The most important function of job costing software is also the most obvious – being able to break down the costs of a project will allow you to provide more accurate estimates.


An estimate is never just a single number – it’s a series of smaller figures, each representing a unique aspect of the project. Projects happen in multiple phases, and each phase carries costs with it – labor, equipment, fuel, materials, storage, and the rest of it. In addition, each project must help pay for your overhead – keeping the lights on in your office, paying full-time staff, etc.


Every contractor’s worst nightmare is taking a loss on a project – you’re desperate for new work, so you put in a bid that feels a little bit lower than it should be. Three months later, the project concludes and you realize that you’ve gone one step forward and two back. Understanding the true costs associated with a job will inform your bidding process and ensure you never take a project that loses you money.


Improve Your Organization for Big Returns

One of the major struggles faced by all contractors is tracking changes in project scope that affect purchasing, cost, and profit. We’re all busy trying to do our best for clients, and sometimes busy people make mistakes. Losing track of even one change order can cost your business hundreds or even thousands of dollars.


Job costing software provides a platform for you to electronically create change orders, ensuring that they are never lost, misplaced, overlooked, or incorrectly sorted for billing. You’ll also be able to monitor the ongoing costs of each project in real-time, ensuring that budgets are not exceeded and that the bills you send to customers accurately reflect the work provided.


Allocate Costs Correctly to Hit Target Profits

Allocating costs accurately is a challenge faced by every contractor and construction firm, especially when it’s unclear how to allocate those costs. For example, it’s obvious that you should mark-up and bill the customer for any labor and materials that go into the project, but what about depreciation on the equipment and vehicles you use? What about the costs of paying your office staff, conducting maintenance on equipment, or fuel costs?


These unseen costs will completely swallow your profit margins and crush your business without the proper tracking tools to pass them on to the customer. Job costing software ensures that you’re allocating costs correctly – the customer pays for all the project inputs, and you can hit the profit margin that’s required for you to stay in business.


Gain New Insights and Improve Future Quoting

The best thing about construction project costing software could be the insights that you gain over time by accurately costing every project that your firm touches. Now, you can break down profit and overhead in each project by task, determining which tasks are most profitable for your firm. In addition, you’ll be able to track the exact labor and materials used on each task and compare those figures to the initial estimate, improving your quoting practices over time.


Construction firms that effectively implement job costing software get great insights into where they can make the most money, and how best to expand their capabilities to break into more profitable markets. For example, you may find that your firm is very competitive on road paving, but less so on building refurbishment. Understanding where you can deliver the most value is key to identifying the best opportunities for your firm to profit.


Minimize Risk and Maximize Growth

Construction is a risky business with razor-thin profit margins, and contractors today tend to keep their businesses modest to limit risk. After all, it’s better to lose $5000 than $50,000, right? With construction job costing software, you can flip the odds in your favor and ensure that every project you win is going to add to your bottom line – not take away from it.


Successful firms use job cost accounting to generate accurate quotes, enabling them to bid on far more projects than before with the assurance that any successful bids will lead to profitable business. You may win a lower ratio of contracts, but with accurate job costing data, you can streamline your bid process and create more quality estimates than ever before.


Reducing risk in your business starts with reducing risk on each contract, and once you can do that, there’s no need to stay small anymore. You’ll be free to boost your profits, expand your capabilities, and grow your business.



Construction job costing software is a crucial investment for contractors that wish to stay competitive and improve their profits. Accurate costing allows you to bid more accurately on projects, stay organized, allocate costs correctly to your customers, and gain insights that will help you bid the right amounts on the right projects. With all the above, you’ll effectively mitigate risk throughout your business and unleash your real potential to boost profits and achieve growth.