The kind of accounting that
really matters in the construction
business is cost
accounting. If the job is not meeting
the budget, then the business is
losing money. Only by accurate
recordkeeping and analysis can you
find out where your estimates are
off and how to correct them.
What Is Job Costing?
Construction projects all follow
the same pattern. You make a cost
estimate as the central part of your
proposal to win the job and, once
work begins, the estimate becomes
a summary of budgeted costs. Job
costing is the process of comparing
budgeted costs to the actual costs
you incur during construction to
see if you are over or under budget.
The most important thing job
costing does is