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.
💡 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.
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: By default job costing is only accessible to team managers and owners. To make it available to everyone in your team; navigate to the jobs section of your Roofr dashboard and uncheck the job costing access box.
How to 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:
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.
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.
💡 Projected costs pull from Proposals and 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.
Job Costing displays Projected Costs and Actual Costs. The above definitions (gross revenue, COGS, etc.) are shared across both projected and actual costs. As a result, you'll see the terms projected and actuals used to denote whether the figure is derived from the proposal (projected), or invoices and material orders (actuals).
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.
🏠 Roofr handles taxes as sales taxes, which are collected on behalf of, and remitted to, the government. Because these taxes are not kept as revenue, they have no bearing on the job’s profitability. As a result, we exclude these from our Gross & Net Revenue calculations.
Projected Cost of Goods Sold (COGS): For projected COGS, we take the sum of all COGS subtotals on the proposal.
📊 While the Proposal Subtotal incorporates markup or margin, we do not include these values when displaying projected COGS. This is because the inclusion of markup or margin in COGS would underrepresent the true gross profit and profit margin.
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
The more you know:
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.
💵 Why the invoice subtotal? For the same reasons we use the Proposal Subtotal, because the balance due includes discounts, but more importantly, taxes. Remember that taxes in Roofr are currently sales taxes and should not be considered as revenue.
🤔 Where are my discounts displayed? Discounts are grouped together to show their impact on Gross Revenue, thus producing Net Revenue.
Actual Cost of Goods Sold (COGS): The sum of all your direct costs. Your direct costs are organized as either Material, Labor, or Other.
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
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
Other Costs — Captures miscellaneous costs, such as dumpster rentals, permits, and fees.
Helps track miscellaneous job expenses
You may add a description to each cost, and see which team member added the cost.
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.
💡 Learn how to add Actuals to Roofr Job Costing HERE
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