There might be several reasons you chose to use Aspire Software. In a lot of ways, it is a one-stop software. Meaning your estimation, sales tracking, scheduling, procurement, time tracking, invoicing, etc. are all in one software. One of the most powerful results companies have when using Aspire is accurate job costing data. Where companies fall short is following processes to ensure accurate job costing, and then actually using the data once they have it.
It Always Starts with the Estimate
In order to easily evaluate your job costs and make decisions, it is important to have your estimates created with separate services for the work types you want to evaluate. Keep in mind, each service creates a separate work ticket. There is a balance of enough work tickets to evaluate job costing, without creating so many work tickets, the frontline team is overwhelmed and unable to manage their hours to the right ticket.
When considering your services, the services you are confident are being performed within the estimated labor hours and costs, may not need their own service. For instance, if your company performs Construction services and has consistently performed softscape installations within budget, you can create a “Softscape” service, without a separate service for each type of work. But perhaps a patio install is something you aren’t confident in the production rates. This would be a service you would want to have a separate service and work ticket for, to ensure the job costing can be carefully evaluated.
Protect Your Job Costing
The data you get out of Aspire is as good as the data you put into it. While the software is built to provide excellent data, it can’t do that without the data to work with. If you want accurate job costing, your costs must all be entered. This means you need processes that support the following:
- Accurate labor hours
- Times are tracked to the right job
- Times are tracked to the right work ticket (service)
- All Purchase Receipts are entered into Aspire
- This includes Material, Sub, Equipment Rental, and Other costs.
- All Inventory Items are allocated to the correct job and work ticket
Now that you have the data, what do you do next?
Once you have accurate job costing data, you need to not only evaluate it, but make changes with it. With so much data at your fingertips, the goal is to find areas to recover costs and increase profitability in a repeatable way. Let’s review a couple of potential determinations you may find, and what to do with them.
- Labor Cost Differences
- Does the production rate need to be reevaluated to include more/less hours?
- Do the Labor Rates need to be updated in Administration?
- Does the frontline team need additional training to increase efficiency?
- Material/Sub/Equipment Rental/Other Cost Differences
- Does the production rate need to be re-evaluated to include a more/less quantity of items (labor or materials)?
- Does the Item Catalog need to be updated with new item pricing?
- Were there any costs not estimated, that need to be included moving forward?
No matter what the variances are that you identify, it comes back to one of two things: Estimation or Production. It is common for the Estimator and Production Manager/Team to want to blame the other. It is important that job costing is evaluated by both teams to help ensure realities are not overlooked.
For instance, the estimator can easily state that the team should have been more efficient, but the production team may note that there were challenges not considered in the estimate. Perhaps the mulch was to be installed in the backyard, but the only entrance was a small gate. The estimator may have not considered this and estimated labor hours for utilizing a wheelbarrow, instead of carrying bags of mulch individually to the back.
As a company utilizing Aspire, you cannot afford to miss out on collecting accurate job costing data and making company decisions with the information. If you are worried your estimation or job costing is not accurate or are stuck with the data but unsure what to do with it, feel free to reach out. Together we can validate the information and determine the next steps.