What is job costing? A lot of people say it is the amount a certain job costs. In a way that is true but not for this discussion.

Job costing starts with the estimate or projected cost of a specified item or project. Then as you create the item or project you use real time data and compare the actual costs to the estimate or projected costs in a line by line itemization. This should be done in such a way that within minutes you can see whether you are on budget or off budget.

Setting a job costing system in your business helps you to manage your business in a tight economy. This could be the difference between success and failure, because you can make course corrections in mid-stream keeping you in a profit producing environment.