Job Costing Done Right: Budgets, Committed Cost and Change Orders

Budget versus committed versus actual is the heartbeat of a profitable construction job. Get it right and you know — today, not at month-end — whether a job is making money. Get it wrong and you find out when it's too late to do anything about it.

That's the job the Job Costing module does in The ERP Experiment: one place where every budget, committed cost and actual cost lines up against the right cost code, with change orders and cost transfers handled properly.

The three numbers that matter

Every cost code on a job carries three figures:

• Budget — what you planned to spend, adjusted by any approved change orders.
• Committed — what you've promised through approved purchase orders and subcontracts but haven't yet been billed for.
• Actual — what you've actually incurred: invoices, receipts and labour, once approved.

The gap between budget and actual is your variance — positive means you're under, negative means you're over. The gap between budget and committed warns you early, before the invoices even land.

Approvals keep the numbers honest

A cost doesn't hit the roll-up the moment someone types it in. Entries start pending and only count once approved. Approve an invoice for less than it was claimed and that's a partial approval — only the approved portion counts toward actual cost. Reject it and it counts for nothing.

This matters because real jobs are messy: claims come in high, costs arrive late and back-dated, and approvals happen in stages. The module is built to handle all of that without distorting your variance.

Change orders, done properly

A change order (or variation) is a signed adjustment to the budget and/or the contract value. It's visible as soon as it's raised, but it only moves the numbers once it's approved — so a pile of draft variations can't quietly inflate your budget. You can tie a budget change to a specific cost code or to the job as a whole, and every decision is stamped with who approved it.

Transfers that stay auditable

Sometimes a cost lands on the wrong code. Instead of editing history, the module transfers it — a paired credit on the source code and debit on the target, sharing one reference. The two codes change; the job total doesn't. Six months later, anyone can see exactly what moved and why.

Everything in pence

Under the hood, every figure is a whole number of pence. Floating-point pounds drift; integers reconcile exactly. You see clean pounds on screen, but the maths underneath always adds up — which is what lets you defend the numbers at month-end.

One subscription

Job Costing is covered by the one ERP Experiment plan. A single subscription, every module — including each new one as it goes live.

👉 Head to the ERP hub, or read how we are leaving the financial core until last.