Job Costing
Landscaping
Best Job Costing Software for Landscape Businesses – Factors You Should Consider
By
Nathan Wheadon
Published at 14.55 on 03.13.2024

In our experience, there are 4 key factors that landscape business owners, operations leaders and finance leaders need to take into considerations when choosing a job costing software solution:

 

  • Implementation and adoption
  • Return on your investment
  • Ease of use and training requirements
  • Amount of data entry
Implementation and adoption

Landscape business leaders (owners, operations and finance) need to be able to easily implement the software, or else there will never be an adequate return on the investment. Implementation is typically based on how useful the software actually is and how big of an issue it will solve for the business.

 

Once a job costing software product has been implemented into regular business operations, adoption is critical. The software must be considered a part of the day-to-day job, and not something that is viewed as “extra” work. This is one of the biggest reasons why software fails. If it feels like it’s a job on top of a job, adoption rates fall off a cliff – especially after the initial novelty period plays out. Software should make the day-to-day easier, not harder. If there isn’t real buy-in from the top down, the software won’t be viewed as a necessity for the business.

Software should make the day-to-day easier, not harder.
Return on your investment

Any job costing software product should either make you more money or save you money. Bottom line, any job costing software should give the business a healthy return on the investment. If your business is “breaking even” – either the monthly cost of the software is the same as the amount you’re saving or making “extra” as a result of the software – it’s not worth the investment.

 

And not just in terms of revenue and profit, but also in time savings.

 

Expediting the job costing process helps in reducing the labor hours required to perform a repetitive and business-critical task.

 

The biggest return from any job costing software solution should be more revenue and more profit. You’ll generate more revenue because in theory you’ll win more jobs since your pricing will be more accurate. And you’ll earn a higher profit margin on the revenue that you’re generating because you’re not “missing” any job costs that eat away at your margins.

The biggest return from any job costing software solution should be more revenue and more profit.
Ease of use and training required

Most CRM and/or ERP software solutions for landscapers have a job costing feature, but getting up and running can be a huge pain. One of the biggest reasons why most software solutions fail is because they require lengthy training. And they’re overly complex. If they’re hard to use, they’re not very effective. And usually the more training required, the lower the adoption rate.

 

This is one of the biggest hurdles with selecting the right software for your business. Software is meant to solve one or more problems that you can’t solve easily with manual methods. We’ve found in talking to a number of our customers that most job costing software solutions and/or CRMs software may solve a few problems, but it also creates new problems.

Amount of data entry required

The output from any software is only as good as the inputs will allow. If you put inaccurate data in, you’re going to get inaccurate results.

 

Garbage in leads to garbage out. The bad data is a big enough pain, but when you factor in the time required to enter all the necessary job costing data into the software system, it’s usually a deal breaker.

 

That’s why so many businesses simply think about the labor hours required to complete a job, then tack on a percentage to “cover their overhead.”

 

Of course, this is flawed for a number of reasons, but given the alternative – it’s the most viable option most businesses have.

Manual data entry is always an issue. If you put inaccurate data in, you’re going to get inaccurate results.
But there’s a better way.

When landscape business owners, operators and finance leaders who are looking to improve their job costing process reach out to us, they are usually dealing with the same set of problems:

1) Missing out on profit because they’re unable to accurately track all of their job costs at a per-job level

Here’s why – understanding fixed overhead costs is pretty straightforward and most business owners and operators have this figured out. These are the monthly or recurring expenses that don’t change regardless of business performance. Examples include facility rent, salaried/admin employee wages, utilities, etc.

 

The variable costs are what kill profitability. Why? Because they’re impossible to track manually and they’re always changing. Variable costs like vehicle maintenance and depreciation, fuel, travel time labor, on-the-job labor and materials and subcontractor costs can all change on a per-job basis.

 

Other software solutions try to take these costs into account, but they’re always reliant on manual data entry. So, you end up with garbage in and garbage out. No other job costing software or CRM software with a job costing feature can accurately track these costs.

 

Momentum uses sensors connected directly to vehicles, equipment and field crews to accurately track field activity, which is then translated into dollars and cents. The sensors eliminate the garbage in, so you’re able to get accurate job costs on a per job-level.

And it’s all itemized so you can see WHY certain jobs weren’t as profitable as you expected. With Momentum you can see the impact of variable costs on your profitability.

Momentum uses sensors connected directly to vehicles, equipment and field crews to accurately track field activity, which is then translated into dollars and cents.
2) Overbidding on new jobs leads to missed revenue opportunities

Here’s why – bidding too high on a job will force a potential customer to look elsewhere for a “better deal.” If you don’t win the job, there’s no revenue coming in.

 

From talking to hundreds of landscapers, this isn’t always the worst case scenario. Of course your business wants to drive revenue, but just “winning” the job doesn’t guarantee that it makes sense for your business.

 

We’ve found that some landscape businesses operate at a break-even, or worse, because they’re not accurately accounting for all of the costs required to get the job done.

By knowing your true job costs, you’re able to bid more precisely on new and on recurring jobs.

 

Since Momentum’s sensors are able to pull data directly from vehicles, equipment and labor activity, you can see exactly how much each job will cost your business to complete. You can also adjust how much profit you need to make from the job, which will change the total amount for the job. You can eliminate overbidding and get the right price in front of your customers. Below is an actual screen shot from our app that shows how all variables costs are calculated AND how you can adjust your profit goal to give you a down-to-the-penny amount.

3) Underbidding on new jobs leads to razor-thin profit margins

Here’s why – when you don’t have a true handle on your job costs, your bids will be a “guesstimation.” Underbidding is even worse than overbidding. Yes, not winning the job doesn’t feel good. Missing out on revenue is never fun. But working a job for little to no profit is much, much worse.

 

Underbidding is the slow leak that sinks the ship. A few drops here and there are manageable, but once the ship takes on too much water, the only direction it’s going is down.

 

Don’t let your business be a sinking ship. Underbidding is a direct result of miscalculating variable costs. We know that variable costs can add up to 10%, 20% or even 30% of a job’s total cost – these are numbers we’ve pulled from running analysis on hundreds of bids. When you consider that the average landscaping job nets somewhere between 8 – 12% profit, margins can be thin. Don’t put yourself or your business in a position to work for pennies instead of dollars because you’re underbidding jobs.

 

Momentum protects you from underbidding because you’re able to see – easily – how much you should be charging your customers because all of your variable costs are calculated for you. Use this for new customers and when rebidding jobs because Momentum will also track all your costs and give you an estimated vs actual breakdown of all your past jobs.

Don’t let your business be a sinking ship.
4) Not having easy access to estimated job costs vs actual cost reporting

Here’s why – calculating estimated vs actual costs for all your jobs is really, really hard. And time consuming. And when you’re reliant on software-only job costing solutions, you’re comparing bad data against bad data.

 

If you’re not using job costing software (and many aren’t, so if that’s you don’t worry!) you’re probably using a bunch of different methods to track your estimated vs actual costs.

Here’s some of the common “solutions” that we’ve heard from talking to landscapers:

  • Excel sheets to create bids and track costs
  • P&L statements
  • Good ol’ whiteboards or pen and paper documents
  • Mobile time tracking apps
  • GPS tracking / fleet management software

 

And of course, CRM systems to help manage customers and workflows. All of these different systems work to a degree, but they keep all data siloed. When your data is siloed, you have to manually “put it all together” to get a complete picture

Getting all your true labor cost information from your employee time tracking system to jive with the data you’re pulling from your fleet management system isn’t easy. And we’ve found it’s usually results in one of two outcomes:

 

  • Actual costs are never verified because it’s too difficult and time consuming.
  • Actual costs are “verified” but it’s inaccurate and takes several hours to compile.

 

Momentum’s connected sensors collect and compute all of this information for you. It solves the issue of siloed data. It solves the issues of using multiple solutions to collect different information, which means there’s no auditing. And since everything happens automatically and in real-time, there’s no time consuming data manipulation needed.

 

Below you can see what the per-job estimated vs actual cost breakdown looks like in the Momentum app. All of the data is populated and calculated automatically.

 

You can see this in real-time AND at the conclusion of a job. With this information at your disposal, you’ll not only be able to understand IF the job was profitable – or not – but also WHY the job was profitable – or not.

5) Understanding which customers are actually driving profit and which ones aren’t

Here’s why – if your landscaping company wasn’t profitable as a whole – you would know! But a problem we’ve helped owners, operators and finance pros uncover is WHICH customers are driving profitability and which ones aren’t.

 

It all stems back to knowing your job costs per customer and per job. The reality for most landscape businesses is that a fraction of their customers are driving the majority of their profits. Where some customers yield a high profit percentage, others are small or just break-even.

 

With Momentum, you’ll be able to see your profitability for every customer. With our software, we’ve been able to help our customers understand what’s really going on. In some cases where they were working low-profit jobs, they were able to adjust their pricing or simply discontinue the business.

All of these issues are significant, and they’re never solved by other software-only solutions because software-only solutions require manual data entry with information that’s impossible to get. That’s why Momentum’s software is powered by data that collected directly from connected sensors.

 

If you’re looking for a better job costing solution, take everything above into consideration. Any software-only solution will simply result in garbage in, garbage out data. That means that your job costing process won’t actually improve.

 

Also, software-only job costing solutions will just take the average of all your job costs and “spread them evenly” across every job. While this might look good at a glance, remember that these numbers are inaccurate because they can’t accurately track variable costs. What most CRMs and job costing software solutions do is apply the same amount of variable costs to all jobs. But if you’re working a job that a few miles from your yard, your travel time labor costs and all your vehicle costs (fuel, depreciation, maintenance) will be much less than a job that’s several miles away. So why would you cost both of those jobs in the same way? There’s so much more to job costing that tacking on a percentage increase to cover overhead.

 

Other software-only job costing solutions will simply sell you a glorified spreadsheet that tracks job costs based on the information you input.

 

That’s why Momentum is so much better.

 

Our sensors do all of the data collection automatically. Then our software automatically calculates and tracks your real job costs. There’s no data entry and you’ll never have to worry about inaccurate information. Our sensors can’t lie and they don’t make mistakes. The best job costing software that you can purchase for your business is one that solves the most challenging part of job costing: accurately accounting for variable costs on a per job level. If you’re able to understand variable costs per job, then you’ll be able to see how the changes in those costs affect your profitability.

 

You can try Momentum for free for 30 days or get a demo of our job costing features here.

 

Of course, there’s other job costing software options available to you, but no other software solution will be able to provide you with precision costs for every single job.