Control Job Costs for Increased Profit Margins Using ERP
ERP Software for Manufacturing
Want to control and improve your job costs? Use an ERP system for accurate job costing – and, identify profit margins. As a manufacturer, you always need to track the true costs involved in a manufactured item, including tangible and intangible resources. Moreover, you can perform detailed analysis and real-time reporting that will help you figure out the true cost.
Why is it important to know job costing?
Though quite a difficult thing to determine true job costs of your custom shop – considering all the resources and complex nature of custom manufacturing. However, it’s vital to figure out exactly how much a job on the shop floor and otherwise will cost you because if you cannot handle this aspect of your business it will drastically eat up your profit margin. You cannot afford it, obviously.
Problems caused due to inaccurate job costing:
Not only the decreased margins and profits by not having a good handle on your job costs, you may also face a number of problems because of erroneous job costing.
Initial estimates significantly differ from the actual costs.
Poor customer relationship management and customer service.
Limited familiarity with your business growth and profitability.
Poor project management, stressing out both managers and teams.
If you actually want to make money on a job, you need precise job costing – knowing its actual cost. It will help you identify the shop floor areas and jobs where you can work more efficiently and hence, save on costs. This detailed, timely and accurate information allows the top management to make more well-informed business decisions – related to production, process efficiency, pricing and more.
How to identify and manage job costs?
As a custom manufacturer, the best way is using ERP software to comprehend and manage your true job costs.
The end-to-end visibility, connectivity and real-time data allow the manufacturers to better manage their shops by figuring out accurate job costs. You can also track every aspect of all each and every job moving through the shop floor. As you get a comprehensive understanding of resources and time required for each job, you can easily determine how much each job will actually cost you.
A fully-integrated, scalable ERP solution allows you to trace all jobs and their costs throughout the production process and therefore, you can confidently allocate and manage the exact costs per employee wage/work center rate. By comparing the initial estimates and the final cost with the help of real-data an ERP provides will help in better prediction of your profits – knowing where your business stands.
Why an ERP solution for job costing?
Real-time costs and progress of every job that moves on a shop floor as part of your approved project plans is a significant benefit of using an ERP software for manufacturing.
Job costing through an ERP not only helps you in making your shop more efficient and effective, but also helps you to decide which jobs to take on, what to charge the clients, how to save money and better predict profit margins.
Use MIE Trak Pro ERP for Job Costing:
MIE Trak Pro ERP has great job costing tools and shop floor management features that can help you improve your manufacturing business.