Agility and Accurate Data Are the Keys to Modern Job Costing Success


Job costing is difficult in an unpredictable economy.

If you estimated your overhead at the beginning of the year like most companies, it’s likely that your applied overhead calculations are far off the mark right now. Considering the number of layoffs announced weekly by large companies, it looks like your massive competitors are way off on their estimates too.

The good news is that, as a small to midsized company, you have much more agility than your larger, enterprise peers. You can fix this problem to improve your competitive edge. With the right data at your fingertips, you will have the power to quickly recalculate your overhead and keep recalculating as the economy continues to fluctuate. With accurate overhead numbers, you will be able to maximize your margins consistently and achieve better growth.

Why Job Costing Estimates Are Falling Flat Right Now

Most small to midsized businesses base their costing on a series of assumptions.

  • Manufacturing overhead is an educated guess by necessity, though these days costs are rising so frequently that it is a good practice to adjust your estimates each time you receive notice about a service price increase.
  • Tracking direct materials is easy to do from invoices, but frequent supplier price jumps can make it a gamble to advance-quote custom jobs in a JIT manufacturing environment. These days, it’s better to know your costs before you quote.
  • Direct labor is easy enough to estimate and track normally but, with worker shortages and COVID-related absences, overtime these days is often higher than you expect it to be. Additionally, training times resulting from high turnover rates may leave jobs running slower than predicted.

Looking at these numbers, it’s clear that staying agile by constantly recalculating estimated overhead can make the difference between profitable companies and those running at a loss.

But recalculation requires that you have good insight into the numbers – and most small to midsized businesses don’t. This is leaving you in the dark when it comes to costing  and pricing activities. That’s a dangerous place to be in an uncertain economy.

Time Tracking Software Gets You Insight into the Numbers

If your company is still wrestling with piles of paper timesheets each week, you barely have enough time to process payroll. You certainly don’t have enough time to divide up those timesheet hours per job to find your true costs. Your accounting team also won’t have the time to constantly recalculate manufacturing overhead and adjust quotes based on rising supplier costs. What you need is a streamlined system to handle timesheets, so you have better insight and more time for analysis.

Labor tracking software gives you that time. It not only simplifies your timesheet management processes, it also improves your leave approval setup and increases companywide efficiency. A good solution will integrate your direct labor numbers right into your job costing tool, so the up-to-date data you need is always at your fingertips.

Here are 2 top labor tracking solutions that integrate with your ERP.

1. Attendance on Demand

The cloud-based Attendance on Demand integrates with any manufacturing ERP system and posts labor hours directly into your job costing tool. It delivers:

  • Real-time numbers. Handles time and labor calculations, including overtime, shift differentials, and holiday rules, with employee self-service for leave requests.
  • Agile scheduling. Calculates your custom labor needs for each shift and updates your scheduling template accordingly, with roster scheduling that keeps your daily schedules agile.
  • Overtime warnings. Provides real-time insight into employee attendance vs. scheduling and gives you advance notice when employees are approaching overtime.
  • Mobile tracking. Delivers full mobile capabilities, including geolocation and geofencing.
  • Built-in communications. Includes an in-app messaging solution for mobile and desktop users that archives and threads all conversations.
  • Quick absence replacements. Automates callout for replacement workers in absences, using filters to find best-fit replacements.

A robust and full-featured workforce management solution, Attendance on Demand is the perfect fit for manufacturers with multiple locations or a combination of remote and shop-floor workers.

2. LightWork Time

Those of you with less complexity in your timesheet processes may prefer LightWork Time, the straightforward, on-premises solution that integrates with any manufacturing ERP system, HR, or payroll system, and posts labor hours directly into your job costing tool. It features:

  • Simplified time entry. Provides simple timesheet entry in lump sums or ranges of specific hours, entered by managers or employees.
  • Accurate rates. Follows earning types for categories including regular, Paid Time Off, and sick time and makes compliance easy for overtime, holiday pay, and other calculations.
  • Real-time hourly accounting. Flexibly allows time entry via desktop punch, kiosk punch, or biometric/swipe timeclocks – all with instant insight.
  • Flexible scheduling. Builds schedules based on set shifts or agile, day-to-day needs, and streamlines the employee leave request process.

LightWork Time is ideal for companies with single or multiple locations that want an easy-to-use timesheet entry system that accommodates remote employees.

Are You Gaining the Benefits of Accurate Data?

Using integrated labor data within job costing tools, today’s savviest leaders now have an unprecedented opportunity to rise to the top through agile pricing.

When you can trust your numbers with accurate, real-time insight, you can improve your competitive edge. The first step is to get your accurate data right where you need it to be in your system.


Contact PeopleSense to Get Your Labor Data into Your Job Costing System


Since 2003, PeopleSense has established itself as the definitive ERP and single source workforce management solution provider for businesses of all sizes throughout the U.S. and Canada, offering consulting for Made2Manage® (M2M®) and Intuitive ERP®, Sage HRMS, time and attendance solutions, Acumatica, and related services and products. PeopleSense provides clients with the peace of mind that comes from working with experienced consultants dedicated to customer service, who are affordably priced with no annual contracts. Learn why PeopleSense is a leading choice for time solutions and services.