Construction job costing software for accurate project tracking

Published Monday 26 January 2026

Table of contents

• What is job costing software?
• Benefits of job costing software for construction
• Key features of construction job costing software
• Breaking down construction job costs
• How to set up job costing software for construction
• Choosing the right job costing software
• Job costing software features that save time
• Get accurate job costing for your construction business
• FAQs on job costing software for construction

Key takeaways

• Implement job costing software to automate calculations and track labour, materials, and overhead costs in real-time, which helps you create accurate estimates and identify budget issues early in construction projects.
• Choose software that integrates seamlessly with your existing accounting system and offers mobile access, so your team can track time and expenses from job sites while keeping all financial data synchronised.
• Set up specific cost codes for labour, materials, and subcontractors when configuring your software to ensure accurate spending tracking and enable detailed project profitability analysis.
• Use the software's reporting tools to compare actual costs against estimates after each project, then refine your estimating process to improve accuracy and protect profit margins on future jobs.

What is job costing software?

Job costing software helps you track all the costs associated with a specific project. Instead of relying on spreadsheets, the software automates calculations to give you a clear picture of a job's profitability.

It's designed to make estimating and tracking easier and faster, so you can have more confidence in your numbers.

Benefits of job costing software for construction

Using software to manage your job costs can help you run a more profitable and efficient construction business. Here are some key benefits:

• Accurate job pricing: Calculate specific costs for each project to create confident estimates and competitive quotes
• Reduced customer disputes: Provide accurate upfront estimates that prevent billing surprises and maintain client relationships, which is crucial given recent regulations like the 2023 Retention Money Amendment Act that affect how project funds are handled.
• Realistic profit margins: Add markup and calculate margins automatically to stay competitive while protecting profitability
• Real-time cost tracking: Monitor actual costs against estimates throughout the project to identify budget issues early, which is vital for tax purposes on projects the ATO defines as long-term because they straddle two or more income years.

Key features of construction job costing software

When looking for job costing software, there are a few key features that can make a big difference for your construction business. Look for software that offers:

• Project tracking: See all your time, costs, and progress for each job in one place.
• Mobile access: Track time and expenses from anywhere, whether you're on site or in the office.
• Invoicing integration: Easily create invoices from your tracked time and costs.
• Reporting tools: Get insights into which jobs are the most profitable with simple, clear reports.

Breaking down construction job costs

Job costing breaks down construction projects into specific cost categories to create accurate estimates and track spending. This method separates your project into major cost centres that software can track automatically:

Labour

Labour costs include direct employees and subcontractors working on your project.

• Calculate employee costs: Work out daily or hourly rates for your direct staff and multiply by expected project time
• Factor in subcontractor rates: Confirm availability and get estimates, but verify with your own calculations
• Build in contingency: Add buffer time for unexpected tasks that typically arise during construction

Materials

Material costs cover all physical items needed to complete your construction project.

• Include direct materials: Calculate costs for wood, steel, electrical wiring and other primary building components
• Add indirect materials: Factor in fasteners, caulking and other supporting supplies
• Cover equipment hire: Include rental costs for tools and machinery
• Account for delivery and wastage: Add margin to cover transportation costs and material losses

Overheads

Overhead costs cover business expenses that do not directly relate to specific construction tasks.

• Equipment depreciation: Account for wear and tear on tools and machinery
• Administrative expenses: Include office rental, insurance and general business costs
• Calculate as percentage: Most builders add a fixed percentage to each job for overhead recovery
• Get professional guidance: Work with an accountant to determine the right overhead calculation for your business, as tax law clarifies that appropriate adjustments must be made to standard accounting methods for income tax purposes.

How to set up job costing software for construction

Getting started with job costing software is straightforward. Here's a simple way to begin:

1. Choose your software: Find a tool that integrates with your accounting software to keep everything connected.
2. Define your cost codes: Set up categories for labour, materials, and subcontractors to track spending accurately.
3. Create your first project: Start with a small job to get comfortable with the process of entering time and expenses.
4. Review and adjust: Use the software's reports to see how your estimates compare to actual costs and refine your process for the next job.

Choosing the right job costing software

The right software should simplify your work and avoid adding extra steps. To choose the best fit for your construction business, think about your needs. Do you need to track time for a large crew? Are you managing multiple subcontractors?

Look for a solution that is easy to use for everyone on your team and connects seamlessly with the other tools you rely on, like your accounting platform.

Job costing software features that save time

One of the biggest advantages of job costing software is the time it saves on admin. Instead of spending hours on spreadsheets, you can get estimates out the door faster.

With the right software, you can submit a timely quote by punching in the numbers and letting the tool do the maths. This frees you up to focus on running the job instead of managing the books.

Download your free construction quote template.

Get accurate job costing for your construction business

Accurate job costing protects your construction business from cost overruns and ensures profitable projects. Job costing software eliminates guesswork by providing precise upfront estimates and real-time budget tracking throughout each project.

This approach helps you maintain control over profitability and make decisions based on clear data. With Xero, you can do the following:

• Track project costs with integrated job costing features
• Browse construction apps in the Xero App Store for specialized tools
• Connect with advisors to help set up your job costing system

Try Xero for free today.

FAQs on job costing software for construction

Here are some common questions about using job costing software in the construction industry.

Is Xero good for job costing?

Yes, Xero is great for job costing. With Xero Projects, you can accurately record all your time and costs for each job. You can use the online time tracker, monitor your progress, and easily create an invoice when you're ready.

What is the best job costing software for construction?

The best software depends on your business needs. Look for a solution that is user-friendly, integrates with your accounting system like Xero, and offers features like mobile time tracking and detailed project reporting. Many apps in the Xero App Store are designed specifically for construction.

How much does construction job costing software cost?

Pricing varies depending on the provider and the features included. Some software is included as part of a wider accounting package, while others are standalone apps with their own subscription fees. It's best to compare a few options to find one that fits your budget and needs.

Can job costing software integrate with existing accounting systems?

Yes, most modern job costing software integrates with popular accounting platforms like Xero. This connection ensures that your financial data is always in sync, saving you from manual data entry and providing a complete view of your business's financial health.