QuickBooks Job Costing — Track Labor, Materials, Expenses & Profitability

Get accurate job costing in QuickBooks — for construction, contractors, trades, agencies, manufacturing, engineering, landscaping, and service businesses.

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Job costing is the #1 reason contractors and project-based businesses struggle in QuickBooks. When setup correctly, it reveals true profit per job, prevents overruns, and fixes inaccurate reporting.

Full
Cost Visibility

Labor
& Materials

Profit
by Job

Accurate
Reporting

What Is Job Costing in QuickBooks?

Job costing tracks all revenue and expenses for each job so you know which projects are profitable, which are losing money, and where costs are leaking.

Labor costs (payroll, subcontractors)
Materials & supplies
Equipment & rentals
Overhead allocation
Income per job
Project-level profitability

Industries That Need Job Costing

Any project or job-based business depends on job costing for pricing & profitability.

Construction & contractors
Trades — plumbing, electrical, HVAC, roofing
Landscaping & outdoor services
Manufacturing & fabrication projects
Engineering & architecture
Marketing agencies & consulting firms
IT services & managed support

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Components of Job Costing

Each cost type must be linked correctly for accurate reporting.

Labor (payroll wages, taxes, workers comp)
Subcontractor costs (1099 labor)
Materials & supplies
Equipment usage & rentals
Overhead allocation
Job-related expenses
Customer deposits & retainage

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How Job Costing Works in QuickBooks

A clear end-to-end workflow.

Create customer → job or project
Assign expenses directly to the job
Assign billable expenses when appropriate
Track labor through payroll or time entries
Assign materials through bills or items
Invoice based on progress or T&M
Run job profitability reports

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Job Costing Cost Flow in QuickBooks

Every cost must be mapped through items for accuracy.

Bills → Items → Jobs
Expenses → Items → Jobs
Checks → Items → Jobs
Payroll → Timesheets / Classes / Customers
Inventory → COGS → Jobs
Subcontractors → Vendor bills → Jobs

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Job Costing Setup Checklist

Use this to set up or repair job costing.

Turn on projects/job costing features
Create customer:job structure or projects
Build a job-focused chart of accounts
Create service, material & labor items
Map items to correct accounts
Turn on billable expenses (optional)
Enable time tracking & payroll allocation

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Labor Costing in QuickBooks

Labor is often the biggest job cost — and the most miscalculated.

Direct labor costs (wages)
Burdened labor (taxes, insurance, overhead)
Tracking labor through payroll
Timesheets assigned to jobs
Supervisor vs worker allocation

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Materials & Inventory for Job Costing

Materials must use items — not simple expenses.

Use items for all materials
Assign items to jobs directly from bills
Manage inventory with reorder points
Track materials used vs purchased
Map materials to correct COGS accounts

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Subcontractor Costs

Subcontractors must be tracked cleanly for accurate job profit.

Vendor bills assigned to the job
Use service items for accurate tracking
Classify subcontractor labor separately
Track lien waivers and compliance

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Overhead Allocation

Overhead ensures true job profitability.

Flat overhead per job
Percentage of labor
Percentage of job cost
Department or division allocation
Custom allocation based on job hours

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Invoicing for Job Costing (Progress Billing & T&M)

Revenue recognition must match job cost workflows.

Progress invoicing for construction jobs
Time & materials invoicing
Retainage tracking
Deposits and prepayments
Markup on billable expenses

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Job Costing Reports in QuickBooks

The most important reports to run monthly.

Job Profitability Summary
Job Profitability Detail
Estimates vs Actuals
Unbilled Time & Expenses
Cost-to-Complete reports
Project Dashboard (QBO)

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Common Job Costing Problems in QuickBooks

Job costing usually breaks because items or workflows are wrong.

Expenses posted without items
Payroll not assigned to jobs
Missing costs or wrong job categories
Jobs showing unrealistic profit/loss
Markup calculations incorrect
Incorrect retainage workflows
Duplicate invoice or expense entries

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Fixing Job Costing Issues

Most job costing issues require structural corrections.

Rebuild items and mapping
Correct payroll job assignment
Repair billable expenses
Redo Estimates vs Actuals
Fix project structures & classes
Adjust beginning job balances

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Cleanup services

Job Costing Success Examples

Common scenarios where job costing transforms profitability.

Construction company finally sees true margin per project
Service agency discovers unprofitable clients due to hidden labor
Landscaping business fixes material cost tracking
Manufacturing shop identifies waste & overuse of materials

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Complete Job Costing Checklist

Use this to implement job costing correctly.

Create projects or customer:job structure
Build full item list (service, labor, materials)
Turn on billable expense tracking
Assign payroll to jobs
Map materials to COGS accounts
Track subcontractor costs per project
Run profitability reports regularly

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Related QuickBooks Pages

Get QuickBooks Job Costing Help

We set up, repair and optimize job costing so you see true profit and make smarter pricing decisions.

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