How do I track labor costs by job in construction?
The foundation is time tracking. Every hour worked needs to be recorded and assigned to a specific job as it happens, not reconstructed later. Waiting until the end of the week means relying on memory, which produces inaccurate data. If your crew worked on three jobs Monday, you need to know how many hours went to each one.
Start with a consistent method your crew will actually use. Paper timesheets work if your team fills them out daily and you collect them weekly. Time tracking apps like Busybusy, ClockShark, or ExakTime let workers clock in and out from their phones and assign time to jobs in real time. The method matters less than consistency.
Capture more than just hours. Record the job name or number, the worker’s name, and the type of work performed. This detail lets you analyze labor costs by phase or cost code, not just by job. That’s how you discover that your framing crew is consistently faster than estimated while your finish work always runs over.
Don’t forget burden costs. An employee making $25/hour doesn’t cost you $25/hour. Add employer payroll taxes, workers compensation insurance, and any benefits you provide. A $25/hour employee might actually cost $32-35/hour fully loaded. Use the burdened rate when calculating job costs.
Enter time data into your accounting software weekly. QuickBooks and other construction job costing software let you assign labor costs to specific jobs. If you’re using timesheets, someone needs to enter that data. If you’re using a time tracking app that integrates with QuickBooks, the process is more automated but still needs review.
Reconcile weekly to catch errors. Did someone forget to switch jobs when they moved to a different site? Did hours get assigned to the wrong project? Did overtime calculate correctly? Weekly reconciliation takes 30 minutes. Fixing three months of bad data takes days.
Subcontractor labor is different from employee labor. You’re not tracking their hours. You’re tracking their invoices. When a sub bills you, code that expense to the job. The distinction matters because subs are a job expense rather than payroll, but they’re still labor costs for that project.
The goal is knowing what labor actually cost on each job so you can compare it to your estimate. If you bid 200 hours of labor at $30/hour burdened and the job took 280 hours, you need to know that before you bid the next similar job. A construction bookkeeper in American Fork who understands job costing can help you set up systems that make this tracking manageable rather than overwhelming.
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More Questions
Can QuickBooks handle job costing for construction?
Yes, QuickBooks can handle job costing for construction if it's configured correctly. Default setup won't work because it tracks expenses at the company level, not by job. Proper configuration includes enabling jobs, setting up construction-specific categories, and coding every transaction to the right project.
Read answerHow do I track costs for each construction project?
Assign every expense to a specific job at the time it happens using cost codes that match how you estimate. Track labor, materials, and subcontractor costs separately by phase, then compare budget to actual weekly.
Read answerHow do I track renovation costs for house flipping?
Treat each flip as a separate project in your accounting software and assign every expense to that property. Track acquisition, renovation, holding, and selling costs by job so you can calculate true profit when you sell.
Read answerShould I outsource payroll or do it myself?
It depends on your employee count, tax compliance comfort level, and time value. Payroll software works for simple situations with 1-4 employees, but outsourcing pays for itself when complexity increases or your time is better spent elsewhere.
Read answerWhat bookkeeping services are available in Utah County?
Utah County has a range of bookkeeping options from solo practitioners to specialized firms. The best fit depends on your business type and whether you need industry-specific expertise like job costing for construction.
Read answerHow do I handle bookkeeping for an excavation company?
Excavation bookkeeping centers on tracking costs by job and by equipment. Every fuel purchase, equipment hour, and material haul needs to tie back to a specific project so you know which jobs actually make money.
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