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“That sounds like a lot of work. Is there a quick and dirty way?”

John smiled at Terry’s question. Everyone wants a fast and simple solution to tough problems. In this case, there was one.

“Just track your labor hours per cost code. Compare the hours used against the hours estimated. If you are good on hours, you should be close on cost and schedule.”

“I always thought that might work. What’s the downside?”

“Construction isn’t the most profitable business in the world. Running a little over on materials or using equipment inefficiently eats holes into your profits.

Not as much as running over on hours, but it does hurt.”

“John, you’ve got that look on your face again. What are you holding back?”

John didn’t want to insult Terry, but Terry asked for it.

“Terry, you may be still missing a critical benefit of job costing. It allows you to set up effective bonus systems for motivating and rewarding fast work. Having fast crews is a tremendous competitive advantage and virtually recession proofs your business all by itself.”

Terry was just beginning to realize John’s real message: Job costing is essential to running a construction business profitably.