- The line between a manufacturer and a job cost or job shop company can run thin, and for some companies they overlap, especially if your organization is manufacturing goods that you will sell on a job. Luckily, we have a definitive product, Sage Pro ERP Job Cost module that allows you to trace costs to individual units of output by means of defining a specific contract with job numbers, phases, categories, cost types, job cost items, and the full use of bill of materials, for batches of goods, jobs or services that you provide your customers.
Organizations like print shops, custom home builders, and custom machine manufacturers use job cost systems. So do companies that produce on cost-based contracts, such as defense, highway, and other type of contractors. Many non-profit organizations use job costing software to account for individual projects. Service organizations also want to track labor and costs that determine the cost of each job performed.
Now, that you know you want job costing capabilities, you might be asking… How do I know if I need the Job Cost or Project Accounting Module?
That’s easy.
- Do you need to track WIP?
- Do you require CSI Divisions?
- Do you require progress billing at the job level?
- Do you need AIA billing capabilities?
- Do you need to view detailed transactional data at the job level?
- Do you require the use of Change Order tracking?
- Do you need to track your subcontractors and validate contract amounts against a job?
- Do you need to allocate overhead to your jobs?
If you answered yes to any of these questions, you need the Sage Pro ERP Job Cost module.
Okay, so what about accounting? If a company had only one department, a single manufacturing overhead account and a single WIP account would suffice. But many manufacturing and job cost companies have several departments through which jobs accumulate direct and indirect material, labor, equipment, subcontracted labor as well as manufacturing overhead. Thus additions will be made to an on-going job as that job progresses through the different phases of its production cycle imparting costs that you want to track in detail along the way. There is also the timing factor that differentiates our job cost organizations from our true to form manufacturers. Job cost organizations typically have job completion cycles that last for longer periods of time than straight line manufacturing.
The primary focus of job cost accounting is to analyze decision making (estimates/budgeting) and performance evaluations of the contracts, batches of goods, jobs or services that you provide. To be successful in any kind of activity, managers must know how much things cost to make by product, department, service provided, etc.
Sage Pro ERP Job Cost’s primary focus is to meet the needs of diverse job-oriented businesses, including made-to-order manufacturing, engineering, architectural, construction, and service/repair companies by providing you the tools to analyze your jobs more effectively.
Look for advanced feature enhancement in the latest release of Sage Pro ERP 7.5 – Project Management capabilities and multiple document interface that give you the same productivity as the other core accounting modules.
Project Accounting
Another module that is often overlooked for those needing to track job cost information but not job transactional detail as the full Job Cost Module would be the Project Accounting Module. This module is excellent for those that do not need:
- to track WIP
- don’t need certified payroll and some of the other major functions of the full JC, but would like to integrate with the sales order and work order module for placing costs against jobs. All entries to the jobs come from the sub-ledgers (AR, AP, SO, PO, WO, PR) when using the Project Accounting Module.
For more information on Sage Pro ERP Job Cost please contact your local WAC Consulting Partner or Karen Smart of Smart e-Solutions, Inc.
Karen Smart is also the instructor for the Sage Pro ERP Job Cost course for Sage Software, PLC.
Important Job Cost Definitions and Acronyms
ERP – Enterprise Resource Planning
CSI – Construction Standards Institute
AIA – American Institute of Architects
WIP – Work in Process
