Hosted by Mark Bradley
- Is the information getting used regularly?
- Is the information getting entered and processed in the most efficient way possible?
- And, ultimately, is it improving your results?
If you answered ‘no’ to any of these questions, chances are that your business is falling victim to one (or more) of the six deadly mistakes of jobcosting.
- Is the information getting used regularly?
- Is the information getting entered and processed in the most efficient way possible?
- And, ultimately, is it improving your results?
Deadly Mistake #1: Doing Jobcosting In Your Head
“We’re a small company. I know how we’re doing on our jobs.”
While this may be true, this will only ever work if you want to stay small and you want to stay in the field. Owners who can’t get out of the field are their own worst enemy! While they keep all the information “up here” (pointing to head), everyone else in the company is completely dependent on them for all the answers to every who, what, when, where and why. Nobody knows how to do their job. Employees get frustrated because they never know how they’re doing. The owner is frustrated because they feel like they have to hold everyone’s hand every day to get the job done right.
Even worse, if it doesn’t look like you’re doing jobcosting – tracking hours and costs and comparing them to how jobs are priced, your people won’t think being profitable is important.
Deadly Mistake #2: Working Without a Good Estimate
A good estimate is essential for jobcosting for landscape companies. The estimate solves 2 critical problems:
- It defines success for the job (the crew has x many hours to complete the work given a specific list of equipment). It’s critical that the owner and the crew are clear about how long this job should take.
- It defines how time and costs should be tracked. In our estimates, each “phase” of the job is assigned a cost code. Our cost codes are a simple, standardized list of categories that we track revenue and costs against. That way, no matter what we name the work on the estimate (e.g. Front Gardens, Zen Garden, Front Gates Entrance Garden, Vegetable Garden), our bookkeeper knows exactly how to enter those costs in accounting (e.g. 1090-Softscapes).
Without standardization from job-to-job, bookeepers and crews have to guess how you want to track their time and costs. Some people make no effort to guess well and the results are predictably useless. Other people try their best to guess correctly, but if they’re entering information in areas that don’t line up with your expectations, the results are still useless.
To get a better sense of what I mean, you can download a sample list of standardized cost codes by going here:
You want to create a list of codes for your company so that every part of every job can be assigned to one standardized code.
Deadly Mistake #3: Too Complicated
A complicated system is another mistake made by many of us. I know because we lived through this mistake for years. We tried to track small details for every task on every job. We wanted to know how much time every component of every job took…
- How much time did it take to excavate the pad?
- How much time did it take to form up the area?
- How much time to install and tie the rebar?
- How much time to pour the concrete?
With all this information, we were sure to become much better at estimating, right? Not in my experience. Unless I was going to pay a timekeeper to stand over this job with a stopwatch, the level of detail was far too much for any foreman to actually track. The result should have been predictable. Crews ‘guessed’ at time on their timesheets. What came in at the end of the day wasn’t what actually happened in the field, it was what the foreman thought I wanted to see. They simply made actual hours as close to estimated hours as they could, filling in hours not by what actually happened, but by what the timesheet form said should be happening. The data was useless.
On top of that, the complex time breakdowns meant things often got missed and forgotten. Tasks would have 0 hours applied to them frequently. That meant another task was over-estimated. More useless information.
Keep it simple. Only bother tracking what’s reasonable to expect to get back from the field. It’s not reasonable to expect our field staff to stop what they’re doing every single time they change tasks to record the time, especially when a foreman is trying to manage 3-5 other people’s time as well! Keep your tasks general and you’ll get better, more useful information.
Deadly Mistake #4: Punchclock for payroll. Handwritten logs for jobcosting.
Visit 10 jobcosting contractors and 8 of them make this mistake. A timeclock (or some timekeeping system) is used for payroll, while daily sheets are filled out by the foreman for jobcosting. In my experience, this lead to a lot of ‘missing hours’ and a whole lot of overhead time invested in trying to reconcile the two systems.
Payroll and jobcosting should be the same system, not different systems. Otherwise, the information coming back is rarely the same. You’ll have 10 hours in the payroll system, but only 8.5 logged to jobcosting. Who’s paying for the 1.5 “missing” hours and where did they go?
Here’s how the scenario always plays out.
The crew punches in first thing in the morning and works all day. They remember to clock in the moment they start work. Then they work all day and ignore their paperwork because it doesn’t affect them and/or their payroll. At the end of the day, before punching out, the foreman sits down and fills out the daily log, or jobcosting sheet, to the best of his/her memory. It has nothing to do with “memory” in reality… they are filling out time in the way that makes everything look like its going as expected. If they spent more time on one site, they’ll shave time off another to make the sheet look good. Everyone wants to show that they’re bringing in jobs on time… but they don’t want to look too good and have their expectations increased. When they’re done the paperwork, they clock out.
There’s a few things wrong with this picture.
You, the owner, have no idea whether these hours are actual job times or just times made to look like actuals. The latter is useless information and a waste of everyone’s time to track and enter it. Secondly, what gets written on the jobcosting sheets isn’t the same as payroll. All kinds of hours are showing up on the punch clocks that are “missing” from timesheets. Time in the AM, PM and between jobs “vanishes” from your jobcosting, but not from your payroll. If you want accurate data, you need to pay someone to sort through these differences and correct them. This is not an efficient use of overhead resources.
You wouldn’t need a person to reconcile if jobcosting and payroll were the same system. Employees are fantastic at tracking their time correctly… just look at how well they track their hours on their paycheques. Make payroll and jobcosting the same system/form and make sure EVERY hour get allocated to something (it doesn’t have to be a customer job – it can be shop time, or deliveries, etc.) and your jobcosting information will be far more accurate and complete.
Deadly Mistake #5: Too Many Systems.
Most companies already have everything they need to use for better jobcosting… their accounting software. Your costs need to get entered into accounting for proper bookkeeping. To reduce errors and time, the most efficient way to jobcost your landscape projects is to use your accounting software that you already own. Quickbooks and Sage 50 (formerly Simply Accounting or Peachtree) both do jobcosting…but most businesses don’t use it. Why not? It’s not because it doesn’t work – it’s because the company doesn’t have systems or processes in place to get the jobcosting data into accounting accurately.
We’ve seen many companies who use several different sheets for jobcosting. We’ve done it ourselves. Crews fill out one sheet for payroll and other for jobcosting. This sheet goes to the owner, this one is used for billing, and then the office manager goes through and re-enters the information into a spreadsheet that goes back in the design file…. The same data is getting entered and re-entered several times over and even worse… often each one shows a different picture. Not only are you wasting too much time entering information, you can’t really trust any of the sources to be 100% accurate.
Keep it lean and keep it simple. You don’t need information getting entered twice and three times in different systems. You need it to get entered once, correctly. We use our accounting because all costs must get entered there anyway. We couldn’t change the way Quickbooks did jobcosting, but we could change the way we did jobcosting to suit Quickbooks. Things got much easier (and leaner!) when we looked at changing our processes to suit our tools rather than using many different tools to suit our processes.
Deadly Mistake #6: No Feedback Back to the Crews.
If you’re going to do jobcosting, share the results with your landscape crews. Without feedback, one of the most common frustrations of your good staff will include “We never know how we’re doing.” Your bad staff won’t care. Without feedback, you’re driving out your good performers and you’re giving your weak, unmotivated people a nice comfortable place to pickup a paycheque every other week.
Share jobcosting information. Give a status update on each job at least each week… more often if your jobs are smaller. You’re not only keeping them in the loop, you’re showing your staff that being profitable is important. For the sake of everyone’s job, and everyone’s standard of living, it is.
Mark Bradley is the president of TBG Landscape (The Beach Gardener) and the Landscape Management Network (LMN). Look for LMN’s new timetracking application for better jobcosting coming out summer 2013!
