Allocating Overhead by Job

Allocating Overhead by Job

Your jobs have to generate enough revenue to not only cover the job, but your overhead AND still result in a profit. So, you need to keep those “extra” costs in mind when estimating jobs. Last time, we discussed allocating at the division level (which might get done monthly or quarterly). Today we’re focusing on the job level. You can allocate overhead costs one of two ways: (1) on an account level (you would view in a P & L for the job) and (2) at the Item level (which provides more detail) – you would view these in your Estimated vs Actual Details and Job Profit Profitability Detail reports

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Allocating Overheard Part 1

Allocating Overheard Part 1

Understanding all the costs that involved with a job is important for contractors. There are the obvious ones such as labor and materials. However, you not only need to cover direct job costs but also the overhead for the business, and still net a profit (or why else be in business?!) A few areas to consider could include office staff/expenses, equipment/vehicle costs (direct and indirect like wear & tear), indirect costs (e.g. fuel), shop staff, repairs & maintenance. There are a variety of ways you can allocate overhead. Today we’ll look at the simplest and fastest method – allocating by division. I’ve broken this up into 2 parts: (1) allocating ALL your overhead expenses and (2) allocating your Indirect Costs

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5 Ways to Lower Overhead Costs

5 Ways to Lower Overhead Costs

Many focus on saving time out in the field – watching hours spent on jobs, looking for ways to improve productivity. But how often do you look at saving time in the office? The profit from your jobs needs to cover your overhead and still leave you with a profit. So it’s a good idea to review what gets done and see if there is a more efficient way to get the work done. Here are 5 ways that can help lower your overhead costs.

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5 Ways To Lower Overhead Costs

5 Ways To Lower Overhead Costs

Many focus on saving time out in the field – watching hours spent on jobs, looking for ways to improve productivity. But how often do you look at saving time in the office? The profit from your jobs needs to cover your overhead and still leave you with a profit. So it’s a good idea to review what gets done and see if there is a more efficient way to get the work done. Here are 5 ways that can help lower your overhead costs.

Read more