Most small remodelers find out whether a job made money after it's over. Job costing moves that answer to while the job is still running, when you can still do something about it.
01What job costing is, in plain terms
Job costing means tracking what each job actually cost against what you estimated, by category, while the job is running. It tells you which jobs make money, which categories you keep underestimating, and whether change orders are covering their cost. You don't need new software to start; a spreadsheet and a weekly habit are enough.
02Pick a few cost categories
Use the same categories in your estimate and your tracking, or the comparison won't work. A small remodeler can start with:
- Labor (your crew)
- Subcontractors
- Materials
- Equipment, dumpster and disposal
- Permits and fees
- Change orders (tracked separately, each with its own price and cost)
03The simple job cost sheet
Update it weekly from receipts, timesheets and sub invoices. "Committed" catches costs you've agreed to but haven't paid yet.
04Change orders are where margin leaks
If a change order isn't priced to cover its own labor, materials and markup, it quietly eats into the job. Give each CO a line with its price and its actual cost. If you're not sure how to price them, start with how to price extra work on a remodel and how to bill for change orders.
05Where AI helps (and where it doesn't)
AI won't know your costs, and you shouldn't let it guess. It is useful for the busywork around the numbers:
Check every total yourself. A spreadsheet's formulas are better than AI arithmetic.
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06A 20-minute weekly review
- Enter the week's costs into each open job's sheet.
- Update "committed" and "projected" for each category.
- Look at variance. Anything over estimate: is it a missed item, a price change, or unbilled extra work?
- Unbilled extra work becomes a change order. Use the change order template.
- When the job closes, note the categories you missed so the next estimate is better. The estimator prompts help with the missed-item check.
07FAQ
Do I need accounting software for this?
Not to start. Many small remodelers begin with a spreadsheet and move to their accounting or project management tool's job costing later. Ask your bookkeeper or accountant how it should tie into your books.
How do I count my own time?
Track it as labor at a rate you set. If you leave it out, every job looks more profitable than it is.