Volca Newsletter
How a $50m operator thinks about job costing
which tier of job costing are you in?
Most operators think they do job costing. What they mean is they check gross margin once a month and move on. When you ask them which jobs are profitable, which services are bleeding, and which technicians are dragging the number down that’s usually when their answer becomes vague.
A CEO at a 50M multi-location HVAC company put it plainly when I was talking to him last week: "Revenue minus materials and equipment minus labor equals gross profit. On every job. Benchmarked against what that department is supposed to hit. That's job costing."
He was describing something most operators aspire to but very few actually have.
The three tiers of Job Costing
Why it matters
Your gross profit is the only money you have to run the rest of your business. Rent, salaries, trucks, insurance. All of it comes out of gross profit. If that number is eroding job by job and you're only catching it at the end of the month, you're always reacting. At that point job costing is a lagging indicator, not a tool.
It also catches things that shouldn't be happening. A $15,000 install with zero materials posted to the job isn't a great job. It's a missing invoice, or a tech who didn't pull a PO, or equipment that never got charged back. Job costing makes those problems visible before they become a habit.
Where most shops are stuck
The bottleneck is data. Labor data lives in ServiceTitan if commissions are being calculated correctly. Material data should be there too, but for most shops it isn't. Manually matching vendor invoices to the right PO, to the right job, at any real volume, doesn't scale. So the analysis never gets more granular than it needs to be to feel complete.
When both sides of the equation are clean and current, job costing stops being a monthly project that someone has to carve out time for. It just happens.
The reality is that most shops reading this are in tier B and some are in tier C and don't realize it.
If you want to know exactly where your shop stands book time with our team where we can walk through your current process and see how we might be able to help you get into tier A.
-Don