Track Costs & Set Prices

Direct Costs/COGS

Overhead Costs

Update Pricing 

Track Margins & Profits

Job Costing Video

 

Direct Costs/COGS

Direct costs are tied to an individual job. Examples would be “We used ‘X’ amount of this on the Johnson job,” (soil, mulch, pavers, man hours etc.). Direct costs are typically where companies begin their job costing journey. 

 

Types of Direct Costs

Labor Work that produces products/services (crew hours)
Materials Plants, Fertilizer, Mulch, Sod, Pavers, Etc. 
Equipment Rented Equipment costs for a specific job
Misc. Expenses Gas, lunch, etc. 

 

Track Direct Costs 

  1. Create Items

    Labor
    Create a line item in the Labor category with Unit of Measure set to Man Hours and cost set to the average hourly cost. 
    Tip: Use Production Rates to calculate estimated man hours for your sales reps. 

    Equipment Create a line item for all large equipment you use. Typically, the cost will be measured per hour. 

    Expenses Add expense items for Miscellaneous Materials, Gas, or any other last minute purchases. 

    Materials Create a line item for all materials you use. Use the sub-category on an item to differentiate materials by division.
    Tip: Use Production Rates to calculate material quantity for your sales reps.

  2. Create Item Groups

    Item Groups allow you to track labor and materials without showing these prices to your customer. For services that don't change job to job, preload labor and materials. Otherwise, add the labor line item to your item group settings, and materials can be added by the sales rep.
    Determine what information is shown on proposals, invoices, and work orders visible to customers and crew with Billable vs. Actual

  3. Create Labor Resources 

    Your crew can track time on a job directly from the My Day Page.

    Tip: If using labor resources, make sure your labor settings are selected to Yes for reporting. If not using labor resources, you can manually adjust man hours on your labor line item.

 

Overhead Costs

Overhead costs are things you need but can’t assign to a specific job. Examples would be your rent on your facility, phones, merchant processing fees, and any non-billable labor (manager’s salaries, etc.). 

 

Types of Overhead

Production Overhead Costs associated with running a production process, such as machinery maintenance, rent, utilities, and depreciation.
Administrative Overhead Costs associated with running a business such as employee salaries, office supplies, insurance, and professional services.
Selling Overhead Costs associated with marketing and selling products such as advertising, promotions, and commissions.
Financial Overhead

Costs associated with managing finances such as merchant fees, accounting, auditing, and taxes. 

 

Calculate Overhead 

  How to Calculate

In SingleOps

Percent Increase (Total annual overhead $$ / Total Annual Sales) x 100 = % Overhead Rate

Example: A business with annual sales of $1,200,000 and annual overhead costs totaling $300,000. 

($300,000/ ($1,200,000) x 100 =
25% overhead


1. Bulk Update Prices/Costs

2. Create a Line Item called "Overhead", this is considered a separate entity, best for reporting. This is a manual process, you will need to calculate overhead for each individual Job.

Direct Labor Increase

Total annual overhead $$ / number of hours on job sites = Hourly Overhead Rate

Example: A business with overhead costs for past year totaling $300,000 and 7,500 hours of direct labor (on a job site).

$300,000 / 7,500 =
$40/hour added to direct labor price

Use this article to create Loaded Labor Rates and use suggested formulas to adjust the rate of a Labor Resource.

 

Update Pricing 

When considering pricing you'll need Direct Costs, Overhead Costs and Profit Goals. Then, you can use the table below to determine Profit Margin or Markup to set prices. 
Update Item Costs and Prices

 

Margin v Markup

Gross Profit Margin ($) Total Revenue - Total Direct Costs 

$100 - $40 = $60
Gross Profit Margin (%)

Gross Profit / Total Revenue

$60 / $100 = 60%

Net Profit Margin ($)

Total Revenue - (Total Direct Costs + Overhead Costs)

( $40 + $35 ) = $75

$100 - ( $75 ) = $25

Net Profit Margin (%)

Net Profit / Total Revenue

$25 / $100 = 25%

Price 

Cost / ( 1 - Net Profit Margin % )

$75 / (1 - 0.25) = $100

Markup ($)

Unit Price - Unit Cost 

$100 - $75 = $25

Markup (%)

( Revenue - Costs ) / Costs

$100 - $75 = $25

( $25 ) / $75 = 33.3%

 

Track Margins & Profits

Now that all costs are being accounted for in SingleOps, you can easily track your profits in SingleOps reporting. 

Job Profit Margin Report

Man Hour Report

 

Job Costing Video

 

 

 

 

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