JOB COST OR OVERHEAD. ONE TEST.
Ask what the cost was incurred for. If there's a project under it, it's a job cost. If it's the price of being open for business, it's overhead. The rule that settles the hard ones is that burden follows the labor and the labor follows the job: send the hour where it was worked, then send its burden to the same place. That's why the same office task is overhead at the shop and a job cost on site, and why a truck is never labor burden whoever drives it.
Most subcontractors classify by what kind of cost it is, which is why they argue about it. A truck isn't a category. It's a truck that was either working a job or sitting, and an hour is the same. Classify by what the money was spent on and the arguments stop, because the answer stops depending on who's asking. The businesses that get this right are also the ones whose overhead rate holds still year over year, and that's not a coincidence.
WHAT IT MEANS.
A job cost is a cost incurred for a specific project. Overhead is a cost incurred to be in business. Every hard case on a subcontractor's books comes back to which of those two sentences is true.
This is the line the whole practice sits on. Get it wrong in one direction and jobs look profitable while the company loses money, because real project costs are hiding in overhead. Get it wrong the other way and overhead looks lean while every job carries weight it never earned. Neither error announces itself, and both show in the same symptom: an overhead rate that drifts every year with nothing to blame it on.
WHERE IT GOES WRONG.
Classifying by what kind of cost it is
Insurance, vehicles, salaries and benefits get sorted into buckets by category, and then the same category gets argued about every month. A cost type has no answer. The hour it paid for does. Ask where the hour went and every case resolves the same way twice, which is the part category-sorting never delivers.
Putting the company truck in labor burden
A truck isn't something an employee is paid, so it isn't labor burden. A truck allowance is, because that runs through payroll. A company vehicle working a job is equipment cost charged to that job at its rate. The same vehicle with no job under it is overhead. Three different answers for one truck, and the only variable is what it was doing.
Job costing an estimator because he's standing on the site
Location doesn't decide it, dedication does. An estimator assigned to one project is a cost of that project whether he's on site or at a desk in the shop. Somebody sitting in a trailer on your biggest job pricing ten other pursuits you may never win is overhead for that day, because he didn't work on the job he was parked at.
WHAT IT LOOKS LIKE IN DOLLARS.
Workers comp, general liability and payroll taxes are rated on payroll dollars, so they scale up and down with the wage and follow it to whichever side of the line the hour went. A per-head benefit like the health premium is different: it's the same figure whichever wage it sits on, which makes it a larger share of a smaller wage. It still follows the hour, it just doesn't shrink with it.
Allowance paid to an employee, so it's labor. Company vehicle working a job, so it's equipment cost on that job. Company vehicle with no job under it, so it's overhead. Equipment left sitting in overhead is one of the most common reasons an overhead percentage climbs every year with no line item to blame.
Everybody codes daily to a job and a task, or to overhead and a task, in hours. Size the task list so a person touches about two of them in a day. That coarseness is the design and not a compromise: a system the field finds heavy is a system the field works around, and hours coded wrong are worse than hours coded roughly, because they carry a decimal point they didn't earn.
THE THREE RULES THAT HOLD.
A business license, picking up the mail, and the gas to go look at a job you don't know you'll win are all costs of being open. Nothing about them changes if you win or lose any particular project. The moment there's a specific project answering for a cost, that project owns it, and that's true of a rented pump, a permit, a hotel room or an hour.
Don't classify burden on its own. Send the hour where it was worked, then send comp, general liability, payroll taxes and benefits to the same place. Office admin work with no project under it is overhead labor burden. The same person doing the same work on site is job cost labor burden. And when there's no job to work on at all, the hours and their burden are both overhead, because idle time, shop time and warehouse time are things the business needed doing.
Job and task, or overhead and task, in hours, every day. Month-long tasks so nobody is picking from forty options at the end of a long day. Get that habit and the hard questions disappear, because a person who codes the work he did never has to answer where he was standing when he did it.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
