If you're tracking job costs in a spreadsheet, or not tracking them at all, there's a good chance your accounting software can already do it. Xero and MYOB both let you tag income and costs to a job and report on each job's profit. Most businesses just never set it up properly, so they find out whether a job made money months after it finished, if at all.
Your accounting software probably already does this
In Xero, job costing is usually done with tracking categories or the Projects feature. In MYOB, it's done with jobs. Either way the idea is the same: you set up each job once, and every bill, subcontractor invoice, timesheet and expense gets tagged to it as it comes through.
Then you run a report and see what each job has cost, split into materials, labour, subcontractors and other costs, right inside the system you're already paying for. No separate spreadsheet, and no end-of-month scramble to match costs to jobs.
What's the catch?
Someone has to set it up, and someone has to keep it clean. That's where most businesses fall down:
- Jobs aren't set up consistently. One job is called "Smith Reno", another "Job 1042". Reports become hard to read.
- Costs aren't tagged at the point of entry. If bills go in without a job and someone tries to fix it later, a lot gets missed.
- Labour isn't included. Wages are often the biggest cost on a job, but if timesheets don't carry a job code, labour never reaches the job report.
- Costs are lumped together. If everything goes to "materials", you can't see whether the problem was concrete, framing or plant hire.
If you're on Xero and not using tracking categories or Projects, you're already paying for job costing and not using it.
How to set up job costing properly
- Agree a job naming rule. A job number plus a short name works well. Use it everywhere: quotes, purchase orders, timesheets and invoices.
- Pick a small set of cost types. For example: labour, materials, subcontractors, plant and equipment, other. Match them to your estimate so you can compare later.
- Make the job code part of every purchase. Put it on purchase orders so suppliers quote it on their invoices.
- Get labour onto jobs. Make sure your timesheet system records which job the hours were for, and that the hours flow through to costing.
- Tag at entry, not later. Whoever enters bills assigns the job straight away, and anything without a job goes to a short "to sort" list that's cleared weekly.
- Review job reports regularly while the job is running, not just at the end.
When the accounting software isn't enough
Basic job costing in Xero or MYOB works well for many businesses. You may need more if you run many jobs at once, need committed costs (orders placed but not yet billed), or need work in progress reporting for your accountant or bank. At that point it's often better to connect a job management system to your accounts than to keep stretching spreadsheets. See construction job costing software and construction WIP reporting for how that can work.
Frequently asked questions
Can Xero do job costing?
Yes. Most businesses use tracking categories or Xero Projects to tag income and costs to jobs and report on each one. It's simple and works well if every transaction is tagged consistently.
Can MYOB do job costing?
Yes. MYOB lets you set up jobs and allocate income and expenses to them, then run job profit reports.
Why don't my job reports match what I expected?
Usually because some costs aren't tagged, labour isn't flowing through, or costs were lumped into one category. Check untagged transactions first.
Do I need separate construction software for job costing?
Not always. If you run a handful of jobs at a time, your accounting software may be enough. Larger or more complex builders often need a job system connected to their accounts.
If you want job costs you can trust without another spreadsheet, book a free initial chat.