Apart from accounting, we offer additional tools to micro evaluate jobs and processes. Used effectively, these models not only provide accurate estimates and pricing but are also useful in following up actual costs to maintain profitability.
Job costing is an effective tool for pricing individual jobs in today’s competitive world and monitoring the profitability. It is a must for the construction and manufacturing industries, where every job has a different specification and its unique cost model. Job costing involves factoring in costs such as labor, material, overheads and then providing an accurate estimate. While most businesses use job costing for estimation purpose only, tracking jobs and its profitability are never focused upon.
We can help you set up the right cost estimating system so that both estimating and tracking the cost of a job become easy.
Process costing is a form of estimation where different processes complement each other to produce the final outcome. This method is primarily used in the manufacturing businesses where mass production is involved. In such businesses, the cost per unit cannot be easily distinguished as there are may be different materials, departments, equipment involved. These various costs can be either directly calculated and added to the product cost or indirectly added as a ratio or percentage in order to come up with the best pricing.
Every industry is different and uses its own pricing strategy and methods to determine the pricing levels of its products and / or services. Whether you are a new business trying to enter the market, maintain your market share or trying new avenues to increase the business, product pricing is a critical factor in the economic well-being of your company.
Pricing strategies can be quite complicated but the basic rule of thumb is the pricing must cover all costs while generating profit, to lower prices you must lower costs, revisit the pricing routinely to reflect the ever changing dynamics of the market.
Too high a price and you lose business, too low a price and despite gaining business, the profitability suffers.
Let us help you make sure that the Price is Right!