Job Costing for Landscapers and Contractors
Job costing helps landscapers and contractors understand which jobs make money by tracking revenue, labor, materials, equipment, and subcontractors.
Short answer
Job costing tracks revenue and direct costs by job so landscapers and contractors can see gross profit and gross margin instead of relying on total revenue.
Checklist
- Track customer and service type.
- Track labor hours and labor cost.
- Track materials, equipment, disposal, and subcontractors.
- Track sales tax separately when applicable.
- Review gross profit and gross margin by job.
- Use the results to price future work better.
Common mistakes
- Judging jobs only by revenue.
- Mixing direct job costs into overhead.
- Ignoring labor cost and payroll burden.
- Not separating materials, subcontractors, and equipment.
- Forgetting equipment rental and dump fees on the job.
- Ignoring travel and material pickup time.
Examples for service businesses
- Example: $5,000 revenue, $1,200 materials, $1,500 direct labor, $300 equipment/disposal, $2,000 gross profit, 40% gross margin.
- A landscaper can compare maintenance work against installation jobs.
- A contractor can see whether subcontractor heavy jobs are priced correctly.
What job costing means for a landscaper
Job costing means tracking the revenue and the direct costs of a single job in the same place, so you can see whether that job actually made money. Instead of looking at one big revenue number at the end of the month, you look at each job and ask whether the price covered labor, materials, equipment, and the trip it took to get there.
For a landscaping or lawn care company, a job can be a mulch install, a planting, a cleanup, a gravel job, or a week of a mowing route. The point is the same: know the margin, not just the revenue.
What to track on every job
Good job costing comes down to capturing a few things consistently on every job.
- Customer and service type (mowing, mulch, planting, cleanup, hardscape)
- Revenue for the job
- Labor hours and labor cost by crew member
- Materials: mulch, plants, rock, gravel, seed, fertilizer, pre-emergent
- Equipment rental or small equipment allocation
- Dump fees, disposal, and delivery
- Subcontractors
- Fuel and material pickup time
- Payment processing fees
Direct job costs vs. overhead
Direct job costs are the costs that exist because the job exists: the mulch, the crew hours, the rental, the dump fee. Overhead is what keeps the business running whether or not you do that job: insurance, software, office costs, advertising.
The most common job costing mistake is letting direct costs slide into overhead. When mulch and rentals get buried in general expenses, every job looks more profitable than it really is, and the P&L cannot tell you which work to do more of.
How to calculate gross profit and gross margin
Gross profit is revenue minus direct job costs. Gross margin is gross profit divided by revenue, shown as a percentage. Margin is what lets you compare a $2,800 mulch job to a $9,000 install fairly: the bigger job is not automatically the better one.
Job examples by type of work
The same math applies across the kinds of work a landscaping company actually does.
Mulch job
- Revenue: $2,800
- Materials: mulch, pre-emergent, delivery, disposal
- Labor: crew hours by worker
- Equipment: small equipment or rental allocation
- Other: fuel, dump fees, payment fees
- Gross profit = revenue minus direct costs · Margin = gross profit / revenue
Tree planting and install example
Material-heavy jobs live or die on markup and labor.
Tree planting / install
- Revenue: $9,000
- Materials: trees, soil, amendments, stakes
- Labor: crew hours plus heavier equipment time
- Equipment: rental or allocation for larger machines
- Subcontractors: if any specialty work is hired out
- Watch: material markup and labor are where margin is won or lost
Seasonal cleanup and mowing route examples
Recurring and labor-heavy work needs the same scrutiny.
Cleanup, gravel, and mowing route
- Cleanup: revenue, crew labor, dump fees, disposal, hauling
- Gravel or rock job: revenue, rock/gravel, equipment rental, labor, delivery
- Mowing route: weekly revenue vs. crew labor, fuel, and drive time across the stops
- Ask: does the route still make sense after labor, fuel, and maintenance?
How to set this up in QuickBooks
In QuickBooks Online, you can track jobs using customers and sub-customers (or projects), assign income and expenses to each job, and use products and services that map back to the right income and cost accounts. Tag labor, materials, equipment, and subcontractors to the job so the profitability report is real.
If your file is not set up this way yet, that is normal. It is usually fixed during a cleanup or setup before monthly bookkeeping begins.
Request a Bookkeeping Review
Sabillon Advisory helps contractors and landscaping companies set up QuickBooks so they can see which jobs actually make money.
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