{"id":18860,"date":"2015-03-03T09:04:35","date_gmt":"2015-03-03T13:04:35","guid":{"rendered":"https:\/\/foundationsoft.com\/?p=772"},"modified":"2025-05-05T09:33:46","modified_gmt":"2025-05-05T13:33:46","slug":"production-reporting-job-costing","status":"publish","type":"post","link":"https:\/\/www.foundationsoft.com\/learn\/production-reporting-job-costing\/","title":{"rendered":"Production Reporting: Using Job Cost Data to Improve Profit Potentials"},"content":{"rendered":"<p><a class=\"gdlr-button medium without-border\" href=\"\/wp-content\/uploads\/articles\/production-reporting-using-job-cost-data-to-improve-profit-potentials.pdf\" target=\"_self\"  style=\"color:#ffffff; background-color:#000000; \"  >Download PDF<\/a><\/p>\n<p><span data-preserver-spaces=\"true\">Ask any <\/span><strong><span data-preserver-spaces=\"true\">contractor<\/span><\/strong><span data-preserver-spaces=\"true\"> what has the <\/span><span data-preserver-spaces=\"true\">greatest<\/span><span data-preserver-spaces=\"true\"> impact on a job&#8217;s bottom line, and chances are the answer will be the same: <\/span><strong><span data-preserver-spaces=\"true\">labor productivity<\/span><\/strong><span data-preserver-spaces=\"true\">. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For <\/span><strong><span data-preserver-spaces=\"true\">general contractors managing multiple trades<\/span><\/strong><span data-preserver-spaces=\"true\">, <\/span><strong><span data-preserver-spaces=\"true\">specialty contractors<\/span><\/strong><span data-preserver-spaces=\"true\">, and <\/span><strong><span data-preserver-spaces=\"true\">commercial builders coordinating large crews<\/span><\/strong><span data-preserver-spaces=\"true\">, no other job cost comes close to providing such a variable for rewards and risks. Compared to other construction cost items such as materials and equipment, labor costs represent <a href=\"https:\/\/gobridgit.com\/blog\/labor-vs-material-cost-in-construction-6-things-to-keep-in-mind\/\">20-40%<\/a> of total construction expenses<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">Contractors<\/span><\/strong><span data-preserver-spaces=\"true\"> need to see <\/span><a href=\"https:\/\/www.foundationsoft.com\/software\/construction-reports\/\"><strong><span data-preserver-spaces=\"true\">production reports<\/span><\/strong><\/a><span data-preserver-spaces=\"true\"> to answer specific job questions, including:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">What is the quantity completed per <\/span><span data-preserver-spaces=\"true\">man-hour<\/span><span data-preserver-spaces=\"true\">?<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">What is the actual versus estimated <\/span><strong><span data-preserver-spaces=\"true\">production rate<\/span><\/strong><span data-preserver-spaces=\"true\">?<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">What will the projected cost for completing the project be based on the average production to date?<\/span><\/li>\n<\/ul>\n<a target=\"_blank\" href=\"\/job-costing-ultimate-guide\/\" class=\"blog-cta-image\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2024\/03\/FSL-blog-post-ad-ultimate-guide.png\" alt=\"UG to Job Costing\" title=\"UG to Job Costing\"><\/a>\n<p>Unfortunately, many contractors simply don\u2019t have access to detailed <strong>production reporting<\/strong>. Without a sophisticated <strong>job-cost accounting software<\/strong><span data-preserver-spaces=\"true\"> that offers features like:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Real-time production tracking with mobile field data entry<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Automated productivity calculations and variance analysis<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Historical performance database for estimating<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Custom report generation by cost code, crew, or activity<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Finding_the_True_Production_Rate\"><\/span>Finding the True Production Rate<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">When <\/span><strong><span data-preserver-spaces=\"true\">contractors<\/span><\/strong><span data-preserver-spaces=\"true\"> estimate the cost of a job, their <\/span><strong><span data-preserver-spaces=\"true\">labor costs<\/span><\/strong><span data-preserver-spaces=\"true\"> are generally determined by what they believe their labor force can complete per labor hour. <\/span><span data-preserver-spaces=\"true\">Industry-standard<\/span> production rates<span data-preserver-spaces=\"true\"> vary by trade:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Pipe installation: 8-12 feet per hour<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Concrete placement: 25-30 cubic yards per hour<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Steel erection: 1.5-2 tons per hour<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Drywall installation: 150-200 square feet per hour<\/span><\/li>\n<\/ul>\n<p>For example, if a job requires 1,000 feet of pipe installation, a contractor may estimate it will take 100 labor hours to complete the work, with an estimated production rate of 10 feet per labor hour.<\/p>\n<p>Of course, few jobs are that simple.<\/p>\n<p>More often, they involve many different field activities, different labor crews, and different pay scales, all of which can affect a contractor&#8217;s production rates.<\/p>\n<p>For example, imagine that a contractor is halfway through a <strong>construction project<\/strong> and finds that he is way behind schedule. Can he identify which field activity is behind? Does he know which crew is underperforming? If so, the job could be saved. If not, the fate of the job remains uncertain.<\/p>\n<p>Using integrated <a href=\"\/software\/payroll\/\">payroll<\/a> and field data, a good <strong>job-costing accounting program<\/strong> can provide contractors with specific, real-time production reporting. With <strong>Foundation\u2019s<\/strong> date-sensitive transaction data and flexible reporting, that\u2019s not the only advantage.<\/p>\n<p>Since contractors can reference their <em>past <\/em>production reports when bidding on similar jobs, their estimates are likely to be more accurate and their profits higher.<\/p>\n<p>What\u2019s more, <strong>historical production reports<\/strong> help contractors identify their strengths and weaknesses, which means they can bid more aggressively on certain field activities or even back away on areas with lower production rates.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_Kind_of_Production_Reports_Should_Contractors_Use\"><\/span>What Kind of Production Reports Should Contractors Use?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Just as no two <strong>construction companies<\/strong> are alike, no two contractors will likely require the same types of production reporting. The kind of jobs a contractor does, its labor force, and many other factors will determine how a company will want to see its production numbers\u2014and how often.<\/p>\n<p>A good construction-specific accounting program, therefore, should offer flexible reporting options. At a minimum, contractors should be able to produce the following reports:<\/p>\n<ul>\n<li><strong>Labor Productivity Report.<\/strong> For every activity or phase, this report shows the number of units completed per labor hour.<\/li>\n<li><strong>Labor Unit Cost Report. <\/strong>This report shows current <strong>labor costs<\/strong> per unit (e.g., for every foot of pipe laid). The costs can include labor costs only or labor and burden together.<\/li>\n<li><strong>Unit Cost Report. <\/strong>Similar to the Labor Unit Cost Report, this report includes all current costs per unit of measure, adding material costs, equipment costs, etc.<\/li>\n<li><strong>Projected Cost Analysis.<\/strong> Based on current costs per unit completed, this report shows what the projected final overall cost will be for a specific activity, as well as how many units are still needed for completion.<\/li>\n<\/ul>\n<a target=\"_blank\" href=\"\/learn\/#schedule-a-live-demo\" class=\"blog-cta-image\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2024\/03\/FSL-blog-post-ad-see-how.png\" alt=\"Get a Demo\" title=\"Get a Demo\"><\/a>\n<p>In addition to standard construction reports, Foundation\u2019s <strong>construction <a href=\"\/software\/construction-reports\/\">report designer<\/a><\/strong> empowers contractors to modify and even create their own custom reports.<\/p>\n<p>Retrieving reports from a job-cost accounting system like Foundation is as easy as:<\/p>\n<ol>\n<li>Entering estimated costs, hours, and units for each field activity that needs to be entered into the system<\/li>\n<li>Entering costs and units as they occur<\/li>\n<\/ol>\n<p>Using data already in the system, a world of production reporting is opened. That means no more guessing on where a job stands and no more guessing on productivity rates for similar job bids.<\/p>\n<p>Best of all, by removing the guesswork on <strong>labor productivity<\/strong>, the rewards can go directly to the bottom line.<\/p>\n<p>*<em>A version of this article first appeared in <\/em>Software Solutions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ask any contractor what has the greatest impact on a job\u2019s bottom line, and chances are the answer will be the same: labor productivity. Compared to other construction cost items such as materials and equipment, no other job cost comes close to providing such a variable for rewards and risks.<\/p>\n","protected":false},"author":17,"featured_media":1691,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_searchwp_excluded":"","inline_featured_image":false,"footnotes":""},"categories":[9],"tags":[14],"class_list":["post-18860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-job-costing"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Production Reporting &amp; Job Costing to Boost Construction Profits<\/title>\n<meta name=\"description\" content=\"Boost labor productivity with detailed reporting that identifies inefficiencies, improves crew performance, enhances estimating accuracy, and ultimately increases project profits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.foundationsoft.com\/learn\/production-reporting-job-costing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Production Reporting: Knowing the True Job Costs of Labor\" \/>\n<meta property=\"og:description\" content=\"Labor productivity has a huge impact on the costs of your construction jobs. 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