How to Set Up Roofr Job Costing

What it does: Allows you to create a financial report card for each Roofr job.

Purpose: Maintain accurate financial records to improve business operations and profit.

Prerequisites:

• Roofr catalog items are correctly tagged as Material, Labor or Other
• Catalog items have correct pricing
• At least one proposal in a “won” status.

💡 Pro Tip: While per-square pricing is supported, using per-line pricing in your Roofr proposal will give you much more detailed insights into your job costs and profitability.

Available On: Elite (Future releases will allow for job costing on Roofr Premium)

Here’s what we’ll cover in this article:

• What is job costing and definitions
• Details of cost calculations
• How to use job costing to measure profitability

👁️ Access Note: Anyone with access to the Roofr job will be able to view the Financials and Job Costing panel.

VIDEO: HOW TO SET UP AND USE ROOFR JOB COSTING

What is Job Costing

Job costing is your key to understanding and improving project profitability. Think of it as a financial report card for each job, showing you exactly how your estimates compare to reality. Unlike your regular accounting system that tracks all money movement, job costing focuses specifically on profitability metrics such as gross profit and gross profit margin for each job, helping you to make better business decisions.

Job costing pulls from Proposals, Material Orders and Invoices, allowing you to keep financial figures consistent in Roofr, and has 2 parts:

1. Projected Costs. These are the costs you include as part of the proposal. Assuming the job goes to plan, you shouldn’t incur any additional costs. At best, these are fine-tuned and accurate nearly 100% of the time, but ultimately, projected costs are only ever that; estimated or anticipated costs.
2. Actual Costs. These are your finalized costs, and can only be truly known one the job is complete. Ideally your actual end-of-day costs match your projected costs, but in many cases costs differ in the form of change orders or extra materials. These should only be input once you have the supplier, crew, or vendor receipts in hand.

💡 Pro Tip: Projected costs pull from Proposals, whereas Actuals pull from Material Orders and Invoices. These differences are labeled as either "actuals" or "projected" in the definitions and calculations.

Job Costing Definitions

Let’s review some definitions before jumping in.

• Gross Revenue: This is your top-line number; the total amount of money earned from sales before any deductions are made. This is the Gross Sales or Gross Revenue from the job.
• Cost of Goods Sold (COGS): The direct cost of producing or purchasing the goods sold by a business, including materials, labor, and manufacturing expenses directly tied to production.
• Gross Profit: The amount earned after subtracting the cost of goods sold (COGS) from its total revenue. It represents the profit made from core business activities, excluding other expenses like depreciation, taxes, and interest.
• Gross Margin: The difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue. It measures how efficiently your company produces and sells its products, and reflects the profitability before accounting for other expenses like overhead, taxes, and interest.

Understanding the Numbers

1. Projected Values

Projected Values summarize your proposal’s gross revenue, COGS, gross profit, and gross profit margin. These come directly from your won proposal(s), and are meant to be used as a benchmark against your actual figures.

• Projected Gross Revenue: The total amount of money you expect to earn from a proposal. For projected Gross Revenue, we use the proposal’s Subtotal.

• Projected Cost of Goods Sold (COGS): For projected COGS, we take the sum of all COGS subtotals on the proposal.

• Projected Gross Profit: The amount earned after subtracting the cost of goods sold (COGS) and discounts from your revenue earned. Gross profit is calculated as follows: Gross Revenue - COGS - discounts
• Projected Gross Margin: Calculated as follows: Projected Gross Profit / Projected Gross Revenue * 100

Other Notes for Projected Values

• Only proposals marked as "won" are included in projected figures
• If you have multiple won proposals for a job, the system will:
  • Add all proposal subtotals together as your projected gross revenue
  • Combine all costs under COGS
  • Combine the gross profit of each proposal under projected gross profit
• You can deselect proposals if they're no longer relevant, and your projections will update automatically

Understanding the Numbers

2. Actual Values

These are your finalized, end-of-day figures, and work as follows:

• Actual Gross Revenue: The actual, total amount of money you collected from the customer. For actual Gross Revenue, we use a combination of Invoice Subtotals, and any revenue manually added.
• 👉 See how we import Roofr Invoices to Job Costing HERE.

• Actual Cost of Goods Sold (COGS): The sum of all your direct costs. Your direct costs are organized as either Material, Labor, or Other.
  1. Materials — Materials are your physical tools, supplies, and equipment. This is where you’ll see Material Orders and add any material expenses that may occur during the job installation.
     • Automatically imports the total from sent material orders
     • Updates in real-time when materials orders are marked as sent
     👉 See how we import Roofr Material Orders to Job Costing HERE
  2. Labor — Labor represents any crew, sub-crew, or inspection labor. Add your hourly labor costs here.
     • Currently requires manual entry
     • Enter actual labor costs as they occur
  3. Other Costs — Captures miscellaneous costs, such as dumpster rentals, permits, and fees.
     • Helps track miscellaneous job expenses

• Actual Gross Profit: Your profit before operating expenses, and it’s calculated as follows: Net Revenue - Direct Costs.
• Operating Expenses: Operating costs are the ongoing expenses incurred from the normal day-to-day of running a business. However, because we’re looking at the profitability of a single job, be sure to only add expenses related to that job, such as commission, overhead, and admin fees. There are 3 ways to add an operating expense:
  • Flat dollar amount
  • % of gross profit
  • % of gross revenue
• Actual Net Profit: Net Profit is the amount retained after subtracting all expenses from total revenue.  It’s your take-home amount after all taxes, costs, and commissions have been paid, and represents the actual profit or loss of the business.

👉 See how to add Actuals to Roofr Job Costing HERE

Bringing it together & measuring profitability

Now that we have our benchmark figures (projected) and our true revenue and costs (actuals), we can look at the comparison and begin to see themes or trends.

Here we can see our projected figures above, and our actual figures below in black. Below those, is the difference between projected and actual, represented as dollar figures and percentages. This comparison helps us to answer the question of: by how much did my actual costs vary from my estimated costs?

This comparison helps to identify patterns, such as routine overspending on materials, or sales reps who underquote and miss margin targets. By seeing these gaps, you can take appropriate action, such as finding cheaper suppliers, improving sales onboarding & education, or increasing your margins to cover spending.

Have More Questions? Check out our Job Costing FAQ

Looking Ahead | What’s Next

Future updates will bring:

• Automated work order integration & labor costs
• Enhanced commission tracking
• Company-wide analytics in the performance dashboard
• YOU tell us!

🤔 Not sure what your profit margins should be? Our guide to job costing covers industry benchmarks and best practices (including four profit killers to watch out for).

Remember: The key to successful job costing is consistent use and regular updates. Start with proper setup, maintain accurate records, and use the insights gained to improve your business operations.

Happy Job Costing! 🎉