Unlocking Accurate Job Costing

Challenge

GrowthLab was introduced to a construction company based out of California through another customer of ours. They signed with GrowthLab for a monthly accounting package, but quickly realized the depth of value we could bring across the entire finance function. We worked with this company closely and became an extension of their team in many areas. The main challenge that many construction companies face, including this one, is job costing. There is a lot to be tracked in job costing... payroll, material costs, permits, etc... This particular company wanted half the payroll to go through job costing and the other half to be allocated to other expense areas. They needed to be able to pull a report and know exactly how much money they were making for each job, and more importantly, if they weren't making money… how come?

Solution

GrowthLab worked with this company on many different projects. For example, we cleaned up their chart of accounts, cleaned up accounts receivables, as well as created products and services within their accounting system to systematize their invoicing process. We utilized services like Bill.com for approving bills, and Hubdoc for bill coding with the accounting team (something our customers don’t often touch, but a system that allows us to create efficiencies on the accounting = decreased costs for our customers). We reached out to the company’s main vendors to get direct contact and allow the management team to take a step back from accounting and focus on growing the business.. 

After getting our foundation set up, we changed focus to creating an integration between payroll and job costing. It took trial and error to get everything to be automated, rather than journal entries, but we knew the eventual time savings and data analysis would be well worth the challenge.

Results

Along with the accounting functions put in place, we were able to sync everything all together. This saves time for the company, instead of entering each invoice in different systems, they can enter the invoice once and it will sync across all systems. This “little” efficiency not only saves time, but also moves data across the platforms, because at the end of the day if you can’t measure and analyze your jobs or profitability, then you’re going to have a difficult time understanding where you make and lose money.  With GrowthLab being an extension of this company's management team, the founders have been able to remove themselves almost entirely from the accounting function… allowing them to work on the business, rather than in the business.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.