Job Costing and Activity Tracking stems from the automation of manufacturing and other business processes. However, most of the companies with repeated business processes can benefit from job tracking and job costing software.
Activity-based costing provides an accurate view of product cost. Activity-based costing determines every activity associated with producing an item and allocates a cost to the activity. The cost assigned to the activity is then assigned to products.
Greater costing accuracy is the main benefit of job costing and activity tracking. Companies assign cost only to the products that require the activity for production. This method ensures that only relevant costs are allocated to a product. That offers an easy analysis of cost and the ability to enable a greater understanding of overhead costs.
Easily calculate profit
One benefit of job costing is that it allows managers to calculate the profit earned on individual jobs, helping them to understand if certain jobs are needed for future planning. This is more relevant for businesses that provide customised products and services. Another advantage of costing is that it allows managers to get detailed information on the production statistics of individual departments.
Keep track of performance
Job activity costing gives managers the advantage of being able to keep track of individual employees and teams performance in terms of cost-control, efficiency and productivity. Activity costing, on the other hand, offers managers the advantage of being able to plan similar activities in entire departments and compare performance over time.
Calculate cost per unit
Job costing and activity tracking can help you estimate the average cost of each unit produced in a business.
Further benefits of Job Costing and Activity Tracking are:
- Synchronise with Business Resources Planning & Payroll
- Automate Business Processes
- Benefit from Savings
- Plan, Schedule, & Cost-Out Future Work
- Optimize Budgets & Workflow
- Eliminate Errors
- Reduce Waste
Job Costing and Activity Tracking software provides a significant return on investment. The more complex a process, the quicker the return after Job Costing and Activity Tracking automation and the more profitable your business will be. Moreover, it gives you total control of activities Costing. It’s also important to note that the planning and adjustments you will make at the start will end-up paying off for years.
Synel’s Job tracking and manufacturing automation software can offer total visibility of your jobs and projects, helps you control timesheets with approval processes and offers visibility of Work In Progress (WIP).
Learn more about Synel’s job tracking software here or contact us to find out more today.
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Source: http://smallbusiness.chron.com/traditional-costing-vs-activitybased-costing-33724.html
