Job costing is the practice of tracking all costs associated with a specific job — labor hours, materials, equipment, travel, and overhead — to determine the true profit margin of each service. Without job costing, businesses often discover they are losing money on certain job types while overcharging on others. Accurate job costing data drives smarter pricing decisions.
A landscaper tracks that a weekly mowing route of 8 properties takes 6 hours of labor at $25/hr, uses $30 in fuel, and generates $520 in revenue — revealing a 62% gross margin before overhead.
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