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Hi, my name is Niall. I’m a co-founder here at LiveCosts.com.
Today, we’re going to take a look at what construction job costing software is. Let’s jump straight into it.
From LiveCosts’ point of view, let’s dive into the software. I’ve already set up a couple of jobs. The goal of job costing software is to help us understand how we’re performing on each individual project. I’ve set up each project with its own budget and different levels of detail.
For example, I’ve broken this one down similarly to a bill of quantities, but it could be as simple as labor, materials, and subcontracting. You can customize the structure however you like. Within each budget, we assign costs. These costs can come from sources like purchase orders. You can raise purchase orders from here or from the mobile app, and each order assigns a committed cost to the job.
We also have an inbox to receive invoices. Invoices arrive there first, then you assign them to the job, and finally post them to your accounting software. We integrate with Xero, Sage 50, Sage Business Cloud, and QuickBooks. When invoices arrive, you can view them and we extract all the relevant information, including line items, so you can assign them to individual budgets or purchase orders.
There’s also a deliveries module to track deliveries from sites, even from the mobile app. We cover timesheets too, whether they’re from your employees, subcontractors, or even your own equipment. All that information comes in daily, so your project costs stay up to date.
Inside each job, you’ll find reporting tools. For example, you can run a phase report at any time to see the budget, work-in-progress, approved costs, and how they compare to the budget. We also offer P&L reports that give you a profit perspective—showing contract values, variations over time, remaining contract value, income from your accounting software, and ultimately the net margin on each job.
If you’d like to see more detail on a project-by-project level, just head over to our website and book a demo with us—or watch the more detailed demo. We’d be happy to help.
Construction job costing software is a tool that helps contractors track the costs of individual construction projects against their budgets.
It brings project costs such as labour, materials, subcontractors, equipment and other expenses together under the relevant job. As costs are committed or incurred, contractors can compare them with the original project budget to see where money is being spent and whether the job is staying on track.
Unlike general accounting software, which records financial activity across the business, construction job costing software focuses on the financial performance of individual jobs.
LiveCosts is a job costing software for construction. In the video above, you can see how LiveCosts takes a project from its initial budget through purchase orders, supplier invoices, labour costs and other project expenses to give contractors an up-to-date view of job costs and profitability.
How Does Construction Job Costing Software Work?
Construction job costing software connects the project budget with the costs generated while the work is being completed.
A typical workflow starts with the project’s estimated costs or budget. As materials are ordered, labour is recorded, subcontractors are engaged and supplier invoices arrive, those costs are assigned to the relevant project and cost category.
The software can then compare:
- Budgeted costs – what you expected the job to cost
- Committed costs – costs you have agreed to but may not have been invoiced for yet
- Actual costs – costs already incurred against the project
For UK contractors, the project cost workflow can also include subcontractor costs subject to the Construction Industry Scheme (CIS), alongside variations, retentions and other contract-related costs.
Bringing these costs back to the job budget gives contractors a more current picture of project performance instead of waiting until the job is complete to find out whether it made the expected margin.
What Costs Can Construction Job Costing Software Track?
Construction job costing software can typically track the main costs associated with delivering a project, including:
- Labour
- Materials
- Subcontractors
- Equipment and plant
- Purchase orders and committed costs
- Supplier invoices
- Variations
- Other project expenses
These costs can be organised by project, phase, cost code or budget item, depending on how the contractor structures their jobs.
For example, if a project has a £30,000 materials budget, material purchase orders and supplier invoices can be allocated against that budget. The contractor can then see how much has been committed, how much has actually been spent and how much budget remains.
The same principle applies to subcontractor packages. Costs can be allocated to the relevant job or cost code so the contractor can understand their impact on the project budget while also managing processes such as CIS deductions where applicable.
Why Is Job Costing Important in Construction?
Knowing the final cost of a project after it finishes is useful for accounting, but it is often too late for project cost control.
Construction job costing helps contractors understand how a project is performing while work is underway.
By comparing the budget with committed and actual costs, contractors can identify:
- Costs running above budget
- Unexpected material, labour or subcontractor spending
- Budget remaining for different areas of the job
- Variations affecting project cost or value
- Changes affecting the expected project margin
- Jobs that are performing better or worse than expected
This gives project and finance teams an opportunity to investigate cost problems before they become larger margin problems.
It also creates a clearer financial record of the job as costs, commitments, variations and subcontractor transactions build throughout the project.
Construction Job Costing Software vs Accounting Software
Accounting software and construction job costing software have related but different roles.
Accounting software manages the wider financial records of the business, while construction job costing software focuses on the costs and financial performance of individual projects.
For example, an accounting system may record a £5,000 supplier invoice. Job costing software connects that £5,000 cost to the relevant project, budget item or cost code so the project team can see how it affects the job’s financial position.
For UK construction businesses, this separation can be particularly useful when project teams also need to manage construction-specific financial processes such as subcontractor costs, CIS, variations and retentions.
The two systems can work together rather than replacing one another.
How Does LiveCosts Handle Construction Job Costing?
LiveCosts brings the financial activity of a construction project back to its job budget.
A project can begin with a simple budget or a more detailed cost structure. Purchase orders, supplier invoices, deliveries, labour timesheets, subcontractor costs and other project expenses can then be connected to that job as work progresses.
This allows contractors to follow the movement from:
Budget → Committed costs → Actual costs → Project performance
LiveCosts uses this information to provide budget vs actual, work in progress and project profit & loss reporting, helping contractors see where each job stands financially.
For UK contractors working with subcontractors, LiveCosts also supports CIS workflows, helping connect subcontractor payments and CIS deductions with the wider project cost and accounting process.
LiveCosts integrate with accounting systems, including Xero, QuickBooks and Sage, allowing contractors to manage detailed construction project costs in LiveCosts while keeping their accounting workflow connected.
Note: The video at the top of this page walks through this construction job costing workflow in LiveCosts, from the initial project budget through purchasing and cost tracking to project reporting.
