Job Ticket Cost & Pricing Analysis

 

The Job Ticket Cost & Pricing Analysis report provides billing staff with analysis of job cost before it’s billed.  You can use it to help price a job and actually compare 3 pricing models, the one given, one based on hourly work type targets and one base on cost margins.  This is important as even bid jobs often suffer from scope creep and it may be possible to identify and bill additional amount for work actually performed.

The report utilizes the same job costing methods as the Profit & Loss reporting for a consistent analysis throughout DSM.  It pulls costs such as labor, blade usage, equipment usage, truck usage, mileage, overhead and job expenses.  Even if it does not make sense for your company to track all these items, you will likely find this report incredibly valuable.

 

This document will cover:

ü Accessing the Report

ü Job Ticket Cost Screen

ü Understanding the Report

 

Accessing the Report

While this report is relevant to any job, it is particularly useful in multi day jobs as it pulls and organizes all those expense into one report.

Access this report right from the ‘Job Ticket’ screen.

 

 

Job Ticket Cost Screen

 

The report takes a number of parameters as shown below.  Note that different markets and different operation styles dictate what factors are important.  Everyone cares about labor costs and overhead but many may choose that mileage is not worth tracking and those costs are best absorbed in overhead.

 

Job Costing Burden Rates (defaults set in File> Administration> Company Configuration on the ‘Job Costing’ tab)

Labor Burden % - Percentage increase for direct costs related to labor such as Employer Taxes, Benefits, Workman’s Compensation (if not tracked separately), etc.  Any employee related expense that increase with the hours works belongs in this category.      

Union Benefit % - Percentage increase for union related fees

Overhead % – This is the percentage of the invoiced amount which is used to pay for expenses not directly charged to the job.  The easiest way to calculate it is through last year’s financial statement.  You simply add all expenses not charged to the job / total sales.

JT Mileage – Mileage Rate charged if truck mileage is tracked on the Job Ticket.

Include Truck Job Costing Hourly Rate – Some customers work with an hourly cost to run a specific truck.  Using this setting you take the truck hourly rate set on the truck definition and multiply it by the hours worked on the job.

Include Workman’s Compensation (% of labor) – Some markets have significant differences in the rates negotiated for various work types.  In this case you can specify the workman’s compensation code by work type (editable on the Timecard portion of the Job Ticket) and charge the job accordingly.  Most companies have the same rate for all jobs in which case it’s best to leave this unchecked and include the rate in your labor burden figure.

Job Ticket Markup – This is the margin % you would like to achieve over your total costs.  Example: If you want a 25% markup and your expenses were $1000 your target markup would suggest $1250 meaning you would make $250 on expenses of $1000 or 25%

 

Details To Show

These options simply allow you to shorten the report for information not important to you.

 

Format

Summary -  format simply suppresses all the detail

Print Included Docs – This will print out all the included field tickets stored as documents with the report.  This Is analogous to a salesman’s packet for pricing with all the job details.

 

Understanding the Report

 

Line Items Entered So Far

This shows what we’ve entered in for billing so far.  In some cases when doing unit pricing, it will show the work done each day such as road work cutting footage.  This is useful information but not used in the pricing analysis.

Timecard

This lists all the labor hours worked on.  It is important that the correct hourly rates are setup on the user definitions for both work and travel time.  If the job is configured to use certified payroll, those rates will apply to the total labor cost which is shown in the summary.  Note that the rates come from the timecard which could be overridden for special rates, overtime, double time, etc. 

Expenses

Expenses include anything charged directly to this job.  This can be blade footage which can easily be collected from the DSM Mobile app or hard expenses such as tolls or dump fees.  They are entered in the Expense tab of the Job Ticket.

Note: Expenses charged to the Jobsite will not be included here as this report would not know how to break down the % of that expense applicable to this invoice.  In that case use the Job Site Profit & Loss Report.

Equipment Used

Equipment used is entered on the Equipment tab of the Job Ticket and reflects the hourly cost of the equipment used.  This is useful for heavy equipment demolition type jobs where you want to charge an hourly cost for a bobcat or demolition robot.  DSM Mobile can aid in collection of this data if you attach the equipment to the job.

Truck Expense

Mileage is the most common truck expense if you are tracking mileage on the job ticket.  Some companies also attach an hourly truck rate to the job where the rate is defined with the truck and multiplied times the total hours used (on job + travel).

Costs

Raw Labor $ (based on wages):  Simply the gross amount, hours * rate for the work done on the job.  The rate includes any overtime, special rates or certified payroll.

Burdon on Labor:  Raw Labor * Labor Burden %.   This represents direct costs related to labor such as Employer Taxes, Benefits, Workman’s Compensation (if not tracked separately), etc.  Any employee related expense that increase with the hours works belongs in this category.

Union Cost:       Raw Labor * Union Benefit %.  This represents union related fees.

Per Diem: These are the costs paid to the employees recorded on the timecard as per diem.  These usually include stipends for out of town lodging or meals.

Workman’s Compensation:  This is the gross revenue * recorded workman’s compensation rate.  These are selected on the timecard screen and usually correspond to the particular work type.  If all work types use the same workman’s compensation rate, it is usually best to simply include the percentage in the Burdon on Labor figure.

Direct Expenses:  Expenses from the above detail

Equipment Usage:  Equipment Usage from above

Truck Hourly Expense:  Truck Expense from above detail

Cost Before Overhead:  All the items above totaled

Overhead (based on inv amt):  This is the invoice amount * Overhead %.  On this report it uses the Invoice Amount of the Cost * Markup amount.  This is tricky to calculate because as you increase the invoice amount to charge, your overhead goes up.  Fortunately, DSM calculates this for you.  In the example above.  In the example above, DSM suggests we invoice $2,352.10 with a total cost of $1881.68.  This means a profit of $470.42.  If we take the profit / cost $470.42 / 1881.68 = .25 or 25% margin

Total Cost:        All these expenses totaled

 

Pricing Models

Price Given:      This is the quoted price listed on the Job Order

Target Amount:        This is the total hours worked times a target rate defined for the work type of the Job.  These rates are defined in the Job Type definition and have a rate for the primary operator as well as additional helpers.  This method does not take into account any expenses therefore is useful for simple service jobs where you can expect to bill so much per hour.

Cost * Markup:         This rate calculates the price by taking your total cost and dividing by your margin %.  total cost * (1 + (margin %/100) or for 25%   total cost * 1.25  If you have adequate cost data and correctly calculate your overhead and labor percentages, this is typically the most accurate costing method.

 

DSM:JC:M:NOV20