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Profits ultimately come from generating margin on each job and then doing enough jobs.
Knowing what each job costs is essential to effective pricing. If your prices are too high, you may lose otherwise profitable work. Too low, the results are all to obvious.
The DHA Job Cost system tells you where you stand on every job that goes through the plant. Which jobs make money. Which lose and why. Where and when to adjust prices. How and when you can lower prices to gain competitive advantage.
The heart of the Job Cost system is total control over labor costs. Every penny of payroll is accounted for either in active billable jobs or in non-productive work. History reports let you analyze costs by job, operation, employee, or machine to make sure your price and time standards are correct. You get a clear picture of the actual cost for each job compared to the estimate.
If direct labor cost are out of line, you see it instantly. If indirect labor gets out of line, you see that just as quickly. You can spot maintenance patterns that may suggest management action. You will discover any inefficiencies in your current system that might yield additional margin. The key is to control labor costs. There is no way for labor costs to get “lost” using DHA Job Cost.
Job reports show estimated and actual costs with variance in dollars and percentages. You can quickly see if the job is out of line with the estimate. Production detail is available for in-depth analysis.
Buyouts and materials are shown with cost and selling price. Every minute of labor is represented with comments where problems occur.
Very little time is required to use Job Cost. Each daily time card takes less than a minute to enter. Data Collection can even eliminate that. The payoff is that all the information you need to control costs and profits are available when you need it. No need to guess.
The system even generates payroll hourly totals to make sure the labor on the cost sheet is the labor you paid for.
Cost reports can be run any time to check job progress, and provide a tool to alert customers to situations that may affect cost and prices. You avoid the embarrassment of trying to explain billing surprises.
Each week a recap report shows average makeready and run times for each machine and each employee. You can see at a glance where productivity is coming from, and where attention is needed to increase output.
Over the course of 3 to 6 months you will have a complete analysis of every operation in your plant. You will know exactly how much each makeready cost on each machine, how many you sold, and how long they took. Feed this information back into the Estimating system and you can virtually eliminate jobs that lose money.
Knowing your true costs gives you greater flexibility in quoting prices.
You will know where you can make competitive adjustments whenever necessary without losing money.
Eliminating non-profitable work, or better yet, making it profitable frees your plant for more productive jobs. Knowing your true costs lets you actively manage profits.
"Job Costing" is part of the DHA line of products, developed by DHA Systems & Software.