Job Costing is Key to Keeping Project Managers Sane

Have you ever tried to put a puzzle together with a two year old?  Those little fingers just keep moving the pieces around. You think you have them lined up and suddenly you find they are all in a different order. Project management is a bit like this. It’s a tough job to manage pieces of a project that are constantly moving. It all boils down to job costing and how the project managers and the sales staff come together to deliver a quote that makes everyone happy.

Project managers are coordinating product and service delivery, managing changes, and scheduling deliverables in the context of resource availability and timeline. This all has to be done so that the project is delivered on time and on budget. This isn’t just for one project at a time; it’s typically happening across several concurrent projects. At the end of a project, they are asked to implement lessons learned back into the quoting process. It makes my head spin thinking about it.  If you ask project managers about strategies that they use to hit their project margins, two key concepts usually come up. We will share one this month and come back in January for the second. If you want to get a jump-start on your labor utilization, download this Quick Start Guide to Labor Utilization.

Start With the Quoting Phase for Successful Project Management

According to most project managers, the success or failure of their projects actually starts in the quoting phase. The problem lies between the sales staff and the project managers. As they go through the process of job costing, the final quotes don’t always match. The project managers typically want to capture the detailed bill of materials and labor estimate associated with each quote. The sales staff wants to “roll up” that detail into a summarized version to make it easier for the customer to make a decision. This is where the challenge comes into play. Those are two competing objectives and it’s not unusual that when multiple quote versions are released, the numbers do not sync up. This causes many headaches for project managers because the numbers they need to hit are not the numbers that the customer receives.

How to Consistently Meet Project Margin Goals

There is no need to worry because there is a solution to this problem. The goal is to consistently hit your project target margins. In order for your project managers to do this, the information presented to the customer from the sales team needs to link directly back to the Bill of Materials and Labor estimate for that quote version. This means that the customer quote with hidden model numbers, a single bulk price, or items grouped together with user-defined headings must match the original quote from the project manager. The original BOM and labor estimate MUST be maintained through the quote versioning process. In the end, it won’t matter which quote version the customer sees, there will always be a clean hand off between sales and order fulfillment. It will give your project managers a fighting chance at hitting their project target margins. If this doesn’t happen, the conversation between your project managers and sales team will be the same argument of what was sold and what is deliverable at that price point.

No matter how you look at it, project management is a tough job. The parts are always moving without notice. It’s not hopeless; if you can give your project managers a few supporting tools and better information they have a fighting chance at hitting their target project margins. With powerful field services software or job costing software, you can save your project managers hours of headaches. These software products will allow the process of job costing to be done seamlessly.

Mindover Software: Experts in Project Management and Job Costing

If you are ready to help keep your project managers sane, the consultants at Mindover Software are here to help. We have experts in the field of project management and job costing. The modular nature of our software applications means you only purchase what you need. From estimating and job creation, to online time card entry and payroll, we can leverage our experience working with technology to give you the efficiencies you seek at a price you can afford. By integrating accounting software, inventory, equipment, labor allocation, and advanced reporting, we have saved some customers thousands of dollars annually. Customized executive dashboards and intuitive project management tools give you the real-time information needed to take decisive action in the face of complex and ever-changing markets.

Our consultants are never too far away to help you design, implement, and support your project and job costing software needs. Contact us today at 866-990-3994 for a free initial solution consultation!

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