Job costing means tracking every dollar that goes into a specific project so you can see what you actually made on it. Most contractors know their total revenue and have a general sense of expenses, but they can’t tell you whether last month’s bathroom remodel was profitable or whether that deck build broke even.

Every job has three main cost buckets: materials, labor, and subcontractors.

Materials are the easiest to track because you have receipts. When you buy lumber, fixtures, or supplies for a specific job, that purchase gets tagged to that project. If you’re buying in bulk or pulling from inventory across multiple jobs, you need to allocate the cost based on what went where.

Labor is where most contractors lose track. Your time has value. Your crew’s time has value. If you spend 40 hours on a job and your labor rate is $50/hour, that’s $2,000 in labor cost whether you write yourself a check or not. Time tracking is essential. Use an app, a simple spreadsheet, or daily logs. Without hours logged, you’re guessing at your biggest cost.

Subcontractor costs are straightforward as long as you assign each invoice to the right job when you receive it. The plumber you hired for one project and the electrician for another should each be tied to the specific job they worked on.

In QuickBooks, you can set up jobs as sub-customers or use the Projects feature. Every expense for that job gets assigned to it. Every invoice you send for that job gets linked there too. This lets you pull a job profitability report that shows revenue minus all tagged costs. Many Long Island bookkeeping services will configure this structure during your initial setup so you start tracking correctly from day one.

The discipline is doing this consistently. When you pay for materials, don’t just categorize it as “materials expense.” Tag it to the specific job. When you pay a subcontractor, assign their invoice to the right project. When you or your crew work on a job, log the hours.

Once you have a few months of data, patterns emerge. You might find that roofing jobs average 35% profit while smaller repair calls average 15%. You might see that certain subcontractors consistently run over budget. You might realize you’ve been underpricing a particular type of work for years.

This information directly improves your bidding. For home and property service businesses, knowing exactly what similar past jobs cost means you can bid new work with confidence instead of guessing. You stop accidentally taking jobs that lose money, and you learn to price the profitable ones correctly.

The most common mistakes are not tracking your own labor hours, forgetting to allocate equipment rental and permits to specific jobs, and recording revenue without tracking the costs that produced it. Fix those and you’ll finally see what each project actually puts in your pocket.