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Unlocking Success in Professional Services: The Role of Efficient Job Costing

27 Jun

Unlocking Success in Professional Services: The Role of Efficient Job Costing

by SMB Suite
in Managed IT
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Efficient financial management is paramount to success, and job costing plays a pivotal role in this regard. Specifically for professional services firms, such as law practices, consulting agencies, architectural services, and others, job costing is fundamental for effective project management and to understand the true costs of your business.

 

Technology trends for professional service providers:

 

Over recent years, advances in technology, evolving business practices, and a rapidly changing environment have shaped the current landscape for professional services firms with new and affordable job costing solutions. Some of the trends that professional service providers can take advantage of include:

 

Automation

We would be remiss to discuss technology and not mention automation and its role in job costing to streamline operations, reduce human error, and save time.

 

The average amount of avoidable rework can take up to 30% of a full-time employee’s overall time, and this can be due to misallocations (which in turn also lead to inaccurate profitability and cost reports). Tools built into job costing systems help businesses automate repetitive tasks, analyze data, and offer recommendations to reduce the chance of human error and ensure costs are accurately allocated to respective projects.

 

Cloud-Based Solutions

The proliferation of cloud technology stems from their scalability, ease of access, cost-effectiveness, and improved data security measures. Organizations get real-time information access, an essential feature for managing multiple projects simultaneously and making prompt, data-driven decisions. With an increase in cyber threats, data security is a mounting concern for businesses. Adopting a secure cloud-based job costing system can help mitigate this risk. These systems come equipped with robust security measures to protect sensitive data.

 

Integration with Enterprise Resource Planning (ERP)

In the absence of real-time data, firms are unable to make timely decisions, resulting in project delays and cost overruns. Data-driven organizations are 23 times more likely to acquire customers, six times more likely to retain them, and 19 times likely to be profitable as a result. Real-time data empowers project managers and executives to make informed decisions that keep projects on track and within budget.

 

Harmonizing job costing systems with ERP provides a seamless interchange of data, fostering better informed and timely decision-making, and as a result, effective planning and execution of projects. With job costing and ERP working in synergy, project managers and financial controllers have more accurate, comprehensive data at their fingertips to track costs across multiple projects.

 

Benefits of Job Costing Systems for Professional Services Firms

Job costing software includes a multitude of features to help your professional services business. Here are some of the key benefits they offer:

 

Profit Performance

Calculate the costs of delivery services so you can ascertain the profit margin of each job. With the data in hand, you can choose which clients will be more profitable or which manner of production will be most efficient. Job costing is particularly valuable for companies that manage custom projects, but it can benefit any professional services firm that needs detailed information about specific task delivery.

 

Employee utilization

Job costing systems let businesses zero in on specific individuals and identify which employees are top producers and which fall short of performance expectations.

 

Analytics

Outline the expenses associated with each job and each project phase within the service delivery process. You’ll be able to analyze job costs individually, identify all the tasks included, and understand the project’s overall cost and can create specific strategies to better control costs in the future.

 

Flexibility

Indirect costs such as administrative overhead also need to take into consideration variables such as salaries and cost allocation – a very time-consuming task! Job costing systems have the flexibility to include and accurately calculate indirect costs easily.

 

Accuracy

Track costs according to your criteria, and direct specific costs to the appropriate accounts. For instance, you can group expenses such as sales and marketing costs specific to jobs instead of in general administrative expenses on the income statement.

 

Scalability

Don’t get stuck with a one size-fits-all solution – set up the system to match unique business processes and scale as needed.

 

Ongoing improvement

Get a bird’s-eye view of the entire service delivery process and create alerts regarding potential issues during the project.

 

Partner with an expert for your success

 

Job costing is a crucial instrument for managing costs and boosting profitability in professional services firms. By embracing the current trends and leveraging technological advancements, businesses can surmount the existing challenges and improve their job costing practices. If your firm is seeking to enhance its job costing process, consider collaborating with an expert in ERP and professional services automation solutions. This partnership could empower your firm to remain competitive, deliver superior services, and meet your strategic business goals.

 

SMB Suite provides professional services organizations with one set of office tools to manage projects, resource scheduling, utilization, and billing. What sets us apart is that our tools are 100% built on Microsoft Cloud, ensuring that your data is safe and secure, while providing a familiar experience for your employees.

 

Learn more about how SMB Suite can help solve your business pains

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Steve’s been with SMB Suite since 1998 and has been involved with nearly every aspects of the Company’s business as a strategist, professional services executive, cloud solutions architect, and senior consultant. In his current role, Steve is responsible for SMB Suite’s revenue and oversees the execution of ERP, CRM and BI projects for customers across a broad range of industries. Steve combines his expertise in MS Dynamics GP, CRM and other Microsoft products with a strong foundation in accounting and business to identify gaps and streamline customers’ processes. Prior to co-founding SMB Suite, Steve was previously Corporate Controller for MEHLE Behr and, prior to that, Audit Senior for Ernst & Young. Steve holds a Bachelor of Business Administration degree from the University of Texas at Arlington.

Jeremy is responsible for SMB Suite’s technology vision, strategy and implementation and is the architect of the Company’s Dynamics Cloud Platform. Highly adept in every facet of managed services, ERP systems and e-commerce platforms, Jeremy’s expertise spans the implementation and support of business and financial software solutions, as well as the customization and integration of SMB Suite’s cloud ERP technology stack. He holds numerous Microsoft and industry-related certifications, and was primarily responsible for designing the Company’s progressive business services platform in the early days of the Cloud. Prior to SMB Suite, Jeremy served as the financial analyst, systems administrator, and information systems liaison for a $2 billion financial services corporation.

Monty is responsible for SMB Suite’s day-to-day operation and, most importantly, its customers. As a leader, motivator and mentor, Monty creates loyal high performance teams willing to “walk through walls” to accomplish their goals. Prior to SMB Suite, Monty served as President of The Bradshaw Group (TBG), a global distributor, manufacturer, and repair facility for digital printers. In this role, he was the Company’s ambassador to its most important domestic, European and Latin American customers and TBG achieved a best-in-class Net Promoter Score of 74 for its superb customer satisfaction. Prior to TBG, Monty served as the General Manager of Sam’s Clubs three highest grossing U.S. stores and was named Regional Operator of the Year in 1999. Monty holds a BBA in Marketing from Texas Tech University and is an active member of Business Navigators. He has been active in Vistage International, Executives in Action, the Dallas/Fort Worth Retail Executives Association, as well as, A.P.I.C.S., the leading professional association for supply chain and operations management. Monty also volunteers with Hunger Busters and ManeGait, a therapeutic horsemanship organization.

David is a proven financial and information technology professional with expertise in providing business accounting software and computing solutions. He began his career by starting and managing a successful independent consulting practice for several years. He then launched the local systems consulting unit of Ernst & Young’s Entrepreneurial Services Group, leading the office into the hi-tech consulting arena. After successfully developing the unit for Ernst & Young, David founded NextCorp (which became SMB Suite in 2013) to serve the business software needs of clients throughout the US. David has made SMB Suite one of the best cloud ERP providers in the industry. In addition to being a successful entrepreneur and leader, he is a software and technology specialist, holding certifications in various Microsoft and other technologies.