Job Costing Fundamentals in Jobpac

Jobpac is designed to provide clear financial control over construction projects. 

Job costing is at the centre of this, giving you a structured way to budget, record and review costs on every job.

Jobs and job numbers

In Jobpac, a project is referred to as a job. Each job is identified by a unique job number within a WorkID.

Key points about job numbers:

• A job number can be up to six characters long.
• It is recommended to use four or five digits where possible.
• Using shorter job numbers leaves room to include the job number inside other references such as subcontract agreement numbers or purchase order numbers that have a fixed length.

A clear, consistent job numbering approach makes it easier to recognise related documents and keep project information aligned.

Cost structure in Jobpac

Jobpac uses a structured approach to job costing based on the project’s work breakdown structure. Costs are captured at a granular level so you can understand where money is being spent.

The key building blocks are:

• Cost Code – identifies a specific part of the work (for example, demolition, foundations or finishes).
• Cost Type – identifies the type of cost for that work (for example, labour, materials or subcontract).
• Cost Centre – the combination of a cost code and a cost type.

Every cost on a project is recorded against a cost centre. This allows you to see, for example, the subcontract cost for demolition separately from the material cost for demolition.

Cost codes

A cost code represents a component of the project’s work breakdown structure.

Key characteristics:

• Can be made up of multiple characters, typically alphanumeric.
• Each major activity or element of the job is assigned its own cost code.
• Provides the “what” of the work being done.

Cost types

A cost type classifies the nature of the cost, such as labour, materials or plant.

Key characteristics:

• Each company can define a standard set of cost types.
• Every project uses a subset of these cost types.
• Provides the “how” or “kind of resource” being used.

Cost centres

A cost centre is the combination of a cost code and a cost type. This is the primary level at which Jobpac tracks project budgets, commitments, costs and forecasts.

At the cost centre level you can:

• set budgets
• record commitments (such as purchase orders and subcontracts)
• record actual costs
• update forecasts and performance

This structure lets you see not just how much is being spent on a job overall, but exactly where it is being spent and on what type of resource.

Budgets at cost centre level

Budgets in Jobpac are managed at the cost centre level. This ensures that the project budget is aligned with the work breakdown structure and the way costs are captured.

Key budget concepts:

• Original budget – the budget agreed at the start of the project for each cost centre.
• Budget changes – adjustments made after the original budget is set, such as transfers between cost centres or changes from variations.
• Current budget – the latest approved budget, reflecting the original budget plus or minus all budget changes.

Once the work breakdown structure and budgets are complete, the budget is usually finalised. After that, changes are controlled and audited so you can track how and why the budget has moved over time.

Key cost concepts in Jobpac

Jobpac differentiates between several types of cost so that you can see not only what has been spent, but also what has been committed and what has been incurred but not yet invoiced.

Committed cost and committed budget

Committed cost is the value that has been committed to suppliers and subcontractors, even if it has not yet been invoiced.

Examples of committed cost:

• the value of purchase orders raised against a cost centre
• the value of subcontract agreements let for a cost centre

Committed budget is the portion of the cost centre budget that has been set aside for a specific purchase order or subcontract.

In many cases, the committed budget is allowed to default to the committed cost, but it can be adjusted if the budgeted amount differs from the contracted amount.

Actual cost

Actual cost is the value of costs that have been approved and posted to the company ledgers for a job.

Examples of actual cost include:

• approved supplier and subcontractor invoices that have been posted
• labour and salary costs that have been processed through payroll
• journal entries and internal plant charges

Actual costs show what has already been recognised in the accounts for the project.

Incurred cost

Incurred cost is the value of goods or services that have been received on the project but are not yet reflected as actual cost in the ledger.

Examples of incurred cost:

• materials delivered to site where a delivery docket has been recorded, but the supplier invoice has not yet been processed
• subcontract work certified in a payment run that has not yet been posted

Incurred costs help you understand work that has effectively taken place, even though invoices are still to be processed.

Accrued cost

Accrued cost is the value of goods or services that have been received but have not yet been captured as either incurred or actual costs.

Accrued costs are typically entered manually based on project knowledge, and they represent costs that should be recognised for reporting even though no documentation has yet been processed.

Cost of work in progress

The cost of work in progress (often abbreviated to CWIP) is the total cost of all goods and services that have been used on a project, regardless of whether they have been invoiced or paid.

CWIP is usually calculated as the sum of:

• actual cost
• incurred cost
• accrued cost

This gives you a realistic view of how much work has been done on the project to date.

Putting job costing fundamentals together

Job costing in Jobpac combines:

• a clear job number structure for each project
• a cost breakdown using cost codes, cost types and cost centres
• budgets at cost centre level, with controlled changes
• cost states that distinguish committed, actual, incurred and accrued costs
• a view of cost of work in progress to show the true cost of work done

When these elements are used consistently, you gain a detailed and reliable picture of project performance, and a strong foundation for forecasting, reporting and financial control.