What Reaches the Job and What Does Not
A purchase can name the job it is for. So can a stock issue, and the cost is stamped at the moment it leaves the store so a finished job cannot change price later. Two things do not reach the job at all, and one of them will surprise you.
The short version
Purchases and stock issues both reach a job cost, and material issued is valued at the cost stamped when it left the store rather than at today's average — which is the correct decision and the one most systems get wrong. What does not reach the job: material moved between your own stores, consumption at task level, and any labour cost rate other than the project's single figure.
Job costing fails in one of two ways. Either things that were consumed never reach the job, or things that reached the job change value afterwards. The second is worse, because it produces a number that is wrong in a way nobody can reproduce.
The decision that matters most
When stock is issued to a job, the unit cost is stamped at the moment of issue and never recalculated.
Consider the alternative, because it is what a naive implementation does. Value each issue at the item's current weighted average, computed when somebody opens the report. Now buy more of that item next month at a higher price. The average moves — and so does the material cost of a job that finished in March, retrospectively, because of a purchase that had nothing to do with it.
A job has to cost the same twice. That is the whole argument, and the stamped cost is what delivers it.
A finished job whose cost moves when you buy something else has not been costed. It has been estimated, repeatedly, by a computer.
Two related details follow the same instinct. Only settled issues count — a pending adjustment does not inflate a job before anybody has approved it. And issues from before the stamped cost existed carry no cost and are skipped rather than guessed, which is the honest treatment of missing data even though it makes an old job look cheap.
What reaches a job
| Source | Reaches the job? | Valued how |
|---|---|---|
| A purchase order raised against the project | Yes | At the order value |
| Stock issued to the project | Yes, once settled | At the cost stamped when it was issued |
| Expenses recorded against the project | Yes, excluding rejected claims | At the claim value |
| Time logged against the project | Yes | At the project's cost rate — see below |
| Stock moved between your own stores | No | Deliberately — a transfer is not consumption |
| Consumption against a task rather than a project | No | There is no task-level material cost |
The fifth row is a decision rather than a gap, and we would defend it. Moving material from your central store to a site store does not consume it; it relocates it. Charging the job at that moment would cost the job for material still sitting on a shelf, and it would make every site store a black hole. Consumption is the issue, not the transfer.
The consequence you have to live with is operational: material only reaches the job when it is issued at the site, so if your site stores do not raise issues, your jobs will look under-costed and your site stores will look overstocked. That is a process requirement rather than a system one, and it is the single most common reason job costing quietly stops working.
The asymmetry in labour
Worth knowing because it is easy to miss and it moves the margin.
A time entry's billing rate can be overridden per entry — there is a field, on the web and on the API, and a senior hour can be billed differently from a junior one on the same job.
A time entry's cost rate cannot be overridden at all. It comes from the project and nothing else. So an engagement's labour cost reduces to total hours multiplied by one figure, whoever worked those hours.
The two together mean the revenue side of a job knows about seniority and the cost side does not. On a mixed team, the margin is therefore wrong in a direction that depends entirely on who happened to do the work.
Four questions about job costing, for any system
Issue material to a job, then buy more of that item at a different price. Does the job cost move?
A good answer sounds like
No — the issue was valued when it happened.
What it actually means
The single best test of a job-costing implementation, and it takes four minutes to run.
When does material hit the job — at transfer to site, or at issue?
A good answer sounds like
At issue, with a reason why.
What it actually means
Either answer can be defended; not knowing means your site stores are either black holes or your jobs are pre-costed.
Can two people's hours cost different amounts on one job?
A good answer sounds like
Yes, per person or per grade.
What it actually means
Ours cannot. On a mixed team that is a real distortion, and it is invisible because the billing side does vary.
What happens to a job with material issued before you had cost stamping?
A good answer sounds like
It is skipped, or clearly marked.
What it actually means
Ours skips it. A system that guesses a historical cost is producing a number nobody can defend in a review.
The two that would move the margin most
Neither of these is a new module. Both are a field and a consumer, on machinery that already exists and already works.
A cost rate per person or grade
The billing side already supports per-entry rates and the cost side already sums hours times a rate. This is the smaller change with the larger effect on reported margin.
Consumption at task level
Material issued against a task rather than only a project, for anybody whose jobs have distinct phases that need costing separately.
Optional costing at transfer
For operations whose site stores genuinely cannot raise issues. We would push back on this one first, because the process fix is usually better than the accounting one.
No dates on a public page. Describe how your sites actually consume material and we will come back with a written scope, timeline and cost.
Scope job costingWhat AWRA OpsHub does today
- A project on a purchase order and on a stock issue, with the project picker verified against your own organisation so a guessed identifier cannot charge somebody else's job.
- Issued material costed at the unit cost stamped at the moment of issue, never revalued.
- Only settled issues counted, so a pending adjustment does not inflate a job.
- Legacy issues with no stamped cost skipped rather than guessed.
- Expenses on a project, excluding rejected claims, and time logged with a per-entry billing rate.
- Actual cost assembled from purchases, issued stock, expenses and logged time, against a budget.
What it does not do
- A project on a stock transfer between your own stores — deliberately, because a transfer is not consumption.
- Task-level material consumption. Costing is per project.
- Any cost rate other than the project's single figure. The billing rate is overridable per entry; the cost rate is not overridable at all.
- A timesheet lock on project time. The month lock guards attendance; project time entries ignore it.
- Retrospective re-costing of an issue when a later cost arrives.
Not ours, by choice
- The stamped cost is the strongest decision in this area and we would put it against anybody's. Most of what follows is a consequence of getting that right.
- The transfer exclusion is a position, not an oversight, and it puts a real requirement on your site stores: material must be issued where it is consumed.
- Nothing here is Ethiopian. It is the arithmetic of costing a job; this is a market where project and contract work is where the growth is.
Check whether your sites are issuing
The commonest failure in job costing is not the software. It is a site store that receives transfers and never raises an issue. One report will tell you whether that is happening to you.
Run the checkFrequently asked questions
Why does a transfer to site not cost the job?
Because moving material is not consuming it. If a transfer costed the job, every job would carry the value of material still sitting on a site shelf, and material returned to the central store would need a credit nobody would remember to raise. The cost lands when the material is issued, which is when it is actually used.
What if our site stores never raise issues?
Then your jobs are under-costed and your site stock is overstated, and no configuration will fix it. This is the one process discipline job costing depends on, and it is worth deciding before go-live who raises issues at a site and how often.
Can I see labour cost by person on a job?
You can see hours by person, and every hour is costed at the project's single cost rate — so the labour cost is total hours times one figure. On a mixed team that understates the cost of senior time and overstates junior time, and the billing side does not have the same limitation, which is what makes the margin misleading rather than merely approximate.
