Roofing job costing in QuickBooks: a per-job setup guide

AlvinUpdated October 7, 20267 min read

Roofing job costing means recording every cost against the roof it belongs to (materials, labor or sub pay, dump fees, permit, commission) and comparing the actual total with what you estimated. Gross margin per job is the job's price minus those direct costs, divided by the price. In QuickBooks you do it by making each job a project or sub-customer, coding every bill and expense to that job, and using a short, consistent list of cost items. Alvin matches supplier invoices and receipts to jobs and flags the ones that are over estimate.

What to track on every roofing job

Scroll sideways to see every column.

Decide once whether commission sits above or below your gross margin line. Shops do it both ways. What matters is that every job is measured the same way, so the numbers compare.

Estimated vs actual: the comparison that matters

Job costing is only useful with a budget beside it. For each job, keep the estimated cost by category from the day it was sold, then set the actual next to it when the job closes. The difference by category tells you what to fix:

• Materials over: waste factor too low, a second delivery, a price increase since the estimate, or returns not credited.
• Labor over: pitch or layers misjudged, decking replaced beyond the allowance and not billed.
• Dump over: a second layer nobody saw, or weight overage.
• Revenue under: a change order done but not invoiced, or a supplement approved but not added to the final invoice.

The estimate side needs a clean line item list. See the roofing estimate template.

How to set up job costing in QuickBooks, conceptually

The steps below describe the structure, not the clicks. QuickBooks plans differ in which features they include (projects and classes are not in every plan), and menus change, so check Intuit's current documentation or ask your bookkeeper for the exact screens.

1. Make every job its own project or sub-customer. The homeowner is the customer; the roof is the job under them. Use the same job name or number your CRM uses, so the two systems line up.
2. Build a short list of items. Products and services such as Roofing materials, Roofing labor, Dump fees, Permit, Commission. Map each to the right income and cost of goods sold accounts. Six to ten items is enough.
3. Code every bill and expense to a job. When a supplier bill, sub invoice or card charge is entered, assign the customer or project on each line. This is the habit the whole system depends on.
4. Get labor onto the job. Sub crews are simple: one bill per job. For hourly crews, record hours by job and apply a loaded hourly cost that includes payroll taxes and workers' comp.
5. Use classes for the bigger split. Classes work well for the type of work: retail re-roof, insurance, repair, commercial. Then you can see margin by line of business as well as by job.
6. Enter the estimate as the budget. Keep the estimated cost by item on the job so reports can show estimate vs actual.
7. Review profitability by job when each one closes, and again monthly for everything still open.

This article is general information, not tax or accounting advice. How costs are classified, how overhead is allocated and how workers are paid have tax and legal consequences. Work with your accountant on the setup.

Worked example: gross margin on one job

The Patel re-roof sold for $15,000. Every number here is an example.

Scroll sideways to see every column.

Gross margin is gross profit divided by price: $3,180 divided by $15,000 is 21.2%. The job was sold at 27.3% and finished six points lower.

The detail explains why. The crew replaced seven sheets of decking against an allowance of three. The extra four sheets meant more material, a second delivery, more sub pay and a heavier dumpster. The contract priced extra decking at $85 a sheet, so $340 should have been billed as a change order and was not. Billing it would have brought revenue to $15,340 and gross profit to $3,520.

Overhead allocation and what a job really earned

Gross margin ignores the office, trucks, insurance, software and marketing. To see what a job contributes after those, apply an overhead rate. A simple method: divide last year's overhead by last year's revenue and apply that percentage to each job.

For example, if overhead ran 12% of revenue, the Patel job carries $1,800 of overhead. Actual gross profit of $3,180 minus $1,800 leaves $1,380, or 9.2% of the price. Other shops allocate by crew day or by square. Pick one method with your accountant and apply it to every job.

Keeping the numbers current

Most job costing fails on data entry. The supplier invoice has a PO number but no job name, the dump receipt is in a truck, and the bookkeeper parks what is unclear in a general account.

• Put the job name or number on every purchase order, so the supplier invoice carries it back. See roofing material orders.
• Have crew leads forward receipts the same day.
• Close each job with a checklist: all bills in, change orders invoiced, returns credited.

What Alvin handles and what stays with you

To check one job quickly, use the free job profit calculator.