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The Importance of Job Costing to Freelancers

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The Importance of Job Costing to Freelancers

  1. 1. Making more MONEY with Job Costing! Samantha L. McCoy
  2. 2. First a short story……..well, two short stories.
  3. 3. Key Concept # 1- Profitability
  4. 4. What is Profitability?
  5. 5. Do you evaluate the profitability of each project once it is completed?
  6. 6. Evaluating your profitability on each project is the only way to determine two important business health checks……. 1. Are you pricing your projects correctly? 2. Are you accounting for all of your costs appropriately?
  7. 7. Key Concept # 2- Using Job Costing to determine Profitability with Project Costs
  8. 8. What is Job Costing? A method used to record costs on a specific project. Generally used in situations where each project is different and is performed to the customer's specification.
  9. 9. Job Costing Example # 1 ** Hourly Rate Assumption or Overhead Burden**
  10. 10. Job Costing Example # 2
  11. 11. Job Costing Example # 2A
  12. 12. Job Costing Example # 2B
  13. 13. Key Concept # 3- Job Costing to a Real Hourly Rate
  14. 14. What expenses do you include in your Hourly (Burden) Rate?
  15. 15. How do you calculate your expenses to include in your Hourly (Burden) Rate? Take the Monthly Expense Cost / by your average monthly hours Example: Phone/ Cable/ Internet $250.00/120 hours = $2.08 an hour
  16. 16. Job Costing to an Hourly Rate: Example # 1 Job Costing
  17. 17. Job Costing to an Hourly Rate: Example # 2
  18. 18. Summary: 1. Always Review Profitability on Your Jobs 2. Job Cost all Project Specific Costs 3. Job Cost Your Overhead Rate
  19. 19. Questions ???

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