Job Costing for Landscapers: How to Know Which Projects Actually Make You Money

Stop Guessing Which Landscaping Jobs Are Profitable

You just completed a major landscaping project. The client is thrilled. Your crew did exceptional work. But here's the critical question: did you actually make money on that job, or did you just work hard for weeks and break even—or worse, lose money?

Most landscaping contractors can't answer this question with certainty. They know their overall business profit at year-end, but they have no idea which specific types of projects generate the best margins and which ones drain resources without adequate return.

This isn't just an accounting problem—it's a strategic business problem. Without accurate job costing, you're making critical business decisions blindly:

• Which services should you market more aggressively?
• Which types of projects should you avoid or price higher?
• Which crews or team members are most efficient?
• Where are materials being wasted?
• How should you adjust your pricing?

Understanding job costing transforms your landscaping business from a volume game ("I just need more customers") to a profitability game ("I need the right customers paying the right prices").

What Is Job Costing for Landscaping Contractors?

Job costing is the process of tracking all expenses associated with a specific project and comparing those costs to the revenue generated. For landscaping contractors, this means knowing the true cost of every hardscape installation, every maintenance contract, every irrigation project, and every design-build job.

A complete job costing system tracks:

• Direct labor costs (crew time on the specific job)
• Materials and supplies used
• Equipment costs (fuel, maintenance, depreciation)
• Subcontractor payments
• Permits and fees
• Disposal and dump fees
• Vehicle and transportation costs
• Overhead allocation

Most landscaping contractors track some of these costs, but rarely all of them. The costs they miss are often the difference between a profitable job and an unprofitable one.

Why Most Landscaping Contractors Get Job Costing Wrong

There are several reasons landscaping contractors struggle with accurate job costing:

1. They don't track labor hours by job: Crew members work on multiple jobs per day, and without time tracking, you're guessing at labor costs.

2. They ignore equipment costs: Your mowers, trucks, and equipment have real costs (fuel, maintenance, depreciation), but many contractors never allocate these to specific jobs.

3. They forget about overhead: Even if you track direct costs, you need to allocate overhead (insurance, office expenses, marketing) to each job.

4. They don't account for waste: That extra load of mulch or the leftover pavers represent real costs that should be tracked.

5. They calculate profit at the wrong time: Many contractors think they made money because the customer paid, without accounting for all the costs that will hit in the following weeks.

The landscaping contractors who succeed long-term are the ones who implement systematic job costing and make business decisions based on data, not gut feeling.

The True Costs of a Landscaping Job: What to Track

Let's break down everything that should be included in your job costing system:

Direct Labor Costs

This is usually the largest expense for landscaping contractors, yet it's often the least accurately tracked. Direct labor includes:

Wages and salaries for crew members working on the specific job

‍Payroll taxes (your employer portion of Social Security, Medicare, unemployment)

‍Workers' compensation insurance allocated to that job

‍Benefits costs if you provide health insurance or other benefits

A landscaping crew making $20/hour actually costs you approximately $26-28/hour when you include employer payroll taxes and workers' comp insurance. Many contractors price jobs based on the wage rate and forget about these additional costs.

How to track it: Implement time tracking where crew members clock in and out by job number. This can be done with mobile apps, time cards, or even simple paper logs. The key is accuracy and consistency.

Materials and Supplies

Materials are usually easier to track than labor, but there are still common mistakes:

Purchased for specific job: Relatively easy—you have the receipt and can assign the cost to that job.

Used from inventory: Harder—you need to track what materials were pulled from your yard inventory and used on each job.

Waste and overages: That extra half-yard of topsoil or the plants that didn't make it need to be accounted for.

Small supplies: Don't forget stakes, landscape fabric, small tools consumed on the job, and other incidentals.

Many landscaping contractors have thousands of dollars in materials sitting in inventory that never gets properly allocated to jobs, making their job costing inaccurate.

Equipment Costs

Your equipment represents a significant investment, and there are real costs every time you use it:

Fuel and oil consumed on the job

‍Maintenance and repairs (should be allocated based on hours used)

‍Depreciation (the equipment is wearing out and losing value)

‍Equipment rental if you had to rent specialty equipment for the job

A comprehensive job costing system allocates equipment costs based on hours used or another reasonable metric. If your commercial mower costs you $0.50 per hour of operation (maintenance, fuel, depreciation), and you used it for 6 hours on a job, that's $3 you need to account for.

Subcontractor and Outside Services

Many landscaping projects require specialized subcontractors:

• Tree services
• Irrigation specialists
• Electrical for landscape lighting
• Concrete contractors
• Equipment rentals

These costs are usually easy to track since you receive invoices, but they need to be properly assigned to the specific job in your accounting system.

Permits, Fees, and Disposal Costs

Don't forget:

• Permit fees for retaining walls or other structures
• Dump fees for debris removal
• HOA application or approval fees
• Inspection fees
• Tree removal permits

These seem like small costs individually, but they add up and affect your profit margin.

Vehicle and Transportation Costs

Getting your crew and equipment to the job site has real costs:

• Fuel for trucks and trailers
• Vehicle maintenance allocated to the job
• Tolls or parking fees
• Vehicle depreciation

Overhead Allocation

Every job needs to contribute to your overhead costs:

• Office expenses
• Insurance (general liability)
• Advertising and marketing
• Office staff salaries
• Professional fees (accounting, legal)
• Software and technology
• Utilities for your shop or office

Most landscaping contractors allocate overhead as a percentage of direct costs or revenue. For example, if your annual overhead is $100,000 and your annual revenue is $500,000, your overhead rate is 20%. A $10,000 job should be allocated $2,000 in overhead costs.

Setting Up Job Costing in QuickBooks for Landscaping Contractors

Most landscaping contractors use QuickBooks for their accounting, which has solid job costing capabilities if set up correctly. Here's the framework:

Step 1: Set Up Your Class Structure

QuickBooks allows you to create "classes" to categorize your business activities. For landscaping contractors, we typically recommend:

• Maintenance Contracts
• Hardscape/Patio Installation
• Landscape Design/Installation
• Irrigation Systems
• Tree/Shrub Services
• Spring Cleanups
• Fall Cleanups

This allows you to track profitability by service type, not just by individual job.

Step 2: Enable Job Costing Features

Turn on QuickBooks job costing and ensure every expense is assigned to both a class (service type) and a customer/job.

Step 3: Create Consistent Accounts

Set up your expense accounts to match how you want to analyze costs:

• Direct Labor - Field Crew
• Payroll Taxes - Field
• Materials - Hardscape
• Materials - Plants and Soil
• Materials - Mulch
• Equipment Fuel
• Equipment Maintenance
• Subcontractors
• Vehicle Expenses
• Permits and Fees

The more detailed your accounts, the better your job costing data.

Step 4: Implement Time Tracking

Use QuickBooks time tracking (or a third-party app that syncs with QuickBooks) to ensure labor hours are allocated to specific jobs and service types. This is the single most important step most landscaping contractors skip.

Step 5: Run Job Profitability Reports

QuickBooks can generate:

• Profit & Loss by Class (showing profitability by service type)
• Profit & Loss by Job (showing profitability by customer/project)
• Job Estimates vs. Actuals (comparing what you bid to actual costs)

Our bookkeeping services for contractors include properly setting up these systems and training your team to use them consistently.

Common Job Costing Mistakes Landscaping Contractors Make

Mistake #1: Inconsistent Cost Assignment

Your crew picks up materials at the supply yard for three different jobs, but you assign all the costs to one job or don't assign them at all. This makes one job look unprofitable and others look more profitable than they really are.

Solution: Separate receipts by job at the time of purchase, or create a system for allocating multi-job purchases.

Mistake #2: Not Tracking Change Orders

The customer asks for additional plants or an extra area to be mulched. You do the work, charge extra, but don't track it as a change order. Your original job estimate looks inaccurate, and you can't analyze whether change orders are profitable.

Solution: Document every change order with additional costs and additional revenue tracked separately.

Mistake #3: Forgetting Warranty and Callback Work

You complete a job and record it as profitable, but then have to return multiple times for warranty issues or to fix problems. Those additional costs never get allocated to the original job.

Solution: Continue tracking costs against the job for a period after completion to capture warranty work. This reveals which types of projects or which crews generate the most callbacks.

Mistake #4: Not Allocating Overhead

You look at direct costs only and think you made 35% profit, forgetting that you have $10,000/month in overhead that needs to be covered.

Solution: Calculate your overhead rate and systematically allocate it to every job.

Mistake #5: Using Outdated Estimates

You're bidding new jobs based on what similar jobs cost two years ago, but labor costs have increased 20% and materials have increased 30%.

Solution: Regular job costing review ensures your estimates stay current with actual costs.

Using Job Costing Data to Make Better Business Decisions

Accurate job costing isn't just about knowing whether you made money—it's about making smarter strategic decisions:

Decision 1: Which Services to Market

If your data shows that hardscape installations generate 18% profit margins while basic maintenance contracts generate 8% margins, you might decide to market hardscape services more aggressively or raise prices on maintenance contracts.

Decision 2: Which Jobs to Turn Down

If you discover that small residential design projects consistently lose money (high labor, lots of changes, customers slow to pay), you can set a minimum project size or choose to refer those projects to others.

Decision 3: How to Price New Jobs

Historical job costing data shows you exactly what similar projects actually cost, allowing you to price new work with confidence instead of guessing.

Decision 4: Where to Improve Efficiency

If job costing reveals that similar projects have wildly different labor hours, you can identify which crews are most efficient and train others to match that performance.

Decision 5: Whether to Buy vs. Rent Equipment

Job costing data can show whether it makes more sense to buy equipment you're using frequently or continue renting it for occasional jobs.

Job Costing for Different Types of Landscaping Work

Different types of landscaping work require different job costing approaches:

Maintenance Contracts

Monthly maintenance contracts are easier to cost if you track:

• Total crew hours per property per month
• Materials used (mulch, treatments, repairs)
• Equipment hours (mowing, trimming, blowing)

Many maintenance contracts that appear profitable at first become break-even or money-losers when you account for all the extra visits, treatments, and services you provide "free" to keep clients happy.

Design-Build Projects

Design-build projects are more complex because costs are spread over a long time:

• Design time (often underestimated)
• Material costs that fluctuate during project duration
• Labor across multiple phases
• Subcontractor coordination time

Best practice: Break design-build projects into phases and track costs by phase to identify where projects typically go over budget.

Installation Projects

One-time installation projects (patios, retaining walls, irrigation systems) are the most straightforward to cost because they have clear start and end dates. Track costs as they occur and calculate final profitability when the project is complete.

Seasonal Services (Spring/Fall Cleanups)

Seasonal services can be costed similarly to maintenance contracts, but watch for:

• Weather delays affecting labor efficiency
• Disposal costs varying by volume
• Equipment strain during peak use periods

How Proper Bookkeeping Enables Accurate Job Costing

You cannot have accurate job costing without excellent bookkeeping. The two are completely interconnected. Here's why:

Real-time expense tracking: You need to know costs as they occur, not weeks or months later when you finally enter receipts.

Proper categorization: Expenses must be assigned to the correct accounts, jobs, and classes every time.

Time tracking integration: Payroll needs to be integrated with job costing so labor costs are automatically allocated.

Consistent procedures: Everyone on your team needs to follow the same system for assigning costs to jobs.

Many landscaping contractors try to handle their own bookkeeping but can't maintain the consistency required for accurate job costing. By the time they try to figure out job profitability, they're missing receipts, can't remember which materials went to which job, and have no idea how many labor hours were actually spent.

Our specialized bookkeeping services for landscaping contractors ensure that every expense is properly tracked, categorized, and assigned to jobs in real-time, giving you accurate profitability data whenever you need it.

Creating a Job Costing Culture in Your Landscaping Business

Job costing only works if your entire team participates:

Train crew leaders to understand why tracking time and materials matters. When they see how the data improves business decisions, they're more likely to participate consistently.

Make it easy with mobile apps, simple forms, or whatever system your team will actually use. The perfect system they won't use is worse than an imperfect system they use consistently.

Share results with your team. When crew leaders see that their efficient work resulted in high-profit jobs, they take pride in that performance. When they see jobs that lost money, they can help identify what went wrong.

Connect it to compensation by considering profit-sharing or bonuses based on job profitability, not just revenue. This aligns everyone's interests with profitable work.

The Role of Estimating in Job Costing

Job costing and estimating work together. Your historical job costing data should directly inform how you estimate new work:

Labor hours: Historical data shows that similar patios typically require 40-50 crew hours, not the 30 you were estimating.

Material quantities: Past jobs reveal that you typically need 15% more materials than the theoretical calculation due to waste, cuts, and adjustments.

Equipment time: Data shows that you consistently underestimate equipment costs on certain types of jobs.

Overhead and profit: Historical data reveals your actual overhead rate, not a guessed percentage.

The landscaping contractors with the most accurate bids are those who base their estimates on actual historical job costing data from similar completed projects.

Advanced Job Costing: Tracking Profitability by Customer, Crew, and Season

Once you have basic job costing working, you can analyze profitability from multiple angles:

Profitability by Customer

Some customers consistently accept your bids without negotiation, pay on time, and approve change orders. Others constantly push for discounts, slow-pay, and request free extras. Your job costing data will reveal which customers are actually profitable relationships.

Profitability by Crew

If you run multiple crews, job costing reveals which crews are most efficient. This might be due to experience, work ethic, or quality of crew leadership. Use this data to reward top performers and provide additional training where needed.

Profitability by Season

Many landscaping contractors are busy spring and fall but have lower profits than expected because they're working with less efficient temporary labor or rushing to meet demand. Job costing by season reveals whether your busiest months are actually your most profitable months.

Profitability by Geographic Area

If you work across a large region, job costing can reveal that projects in certain areas are less profitable due to travel time, traffic, or more competitive pricing. This might influence where you focus your marketing efforts.

Common Questions About Job Costing for Landscaping Contractors

How detailed should my job costing be?

Detailed enough to make good decisions, but not so detailed that it becomes burdensome. At minimum, track labor, materials, equipment, subcontractors, and allocate overhead. You can always add more detail later.

Should I track costs for every single job, even small maintenance contracts?

Yes. Even a $100 lawn mowing visit has costs that should be tracked. You might do this at a summary level (total costs per property per month) rather than tracking every individual visit, but you need to know if your maintenance contracts are profitable.

What if I discover that my most popular service is unprofitable?

This is valuable information! You have several options: raise your prices, find ways to reduce costs, discontinue the service, or accept lower margins on that service if it leads to other profitable work. But you can't make this decision without the data.

How often should I review job costing reports?

At minimum, review job profitability monthly and conduct a comprehensive review quarterly. Some contractors review weekly during busy seasons to catch problems early.

Can I do job costing with simple spreadsheets instead of accounting software?

You can, but it's much harder and more error-prone. Accounting software like QuickBooks is designed for job costing and can automatically pull in data from time tracking, receipts, and payroll. Spreadsheets require manual entry at every step.

What profit margin should I target for landscaping jobs?

This varies by service type, but generally: 15-25% for installation projects, 10-15% for maintenance contracts, 20-30% for design services. The key is knowing your actual margins and making intentional decisions about pricing.

How do I handle jobs that span multiple months?

Use QuickBooks job costing features to track costs as they occur, but don't calculate final profitability until the project is complete. You can review costs-to-date throughout the project to ensure you're on track with your estimate.

What if my job costing reveals that I'm losing money on many jobs?

This is a critical wake-up call. You need to either raise prices, reduce costs, or change the types of jobs you accept. Many landscaping contractors work incredibly hard and stay busy but don't make money because they never analyzed job profitability. Our accounting services for landscaping contractors include pricing analysis and strategies to improve profitability.

How Asnani CPA Helps Landscaping Contractors Implement Job Costing

At Asnani CPA, we've helped numerous landscaping contractors throughout the San Francisco Bay Area implement job costing systems that transform their businesses. Our approach includes:

QuickBooks setup and optimization specifically configured for landscaping contractor job costing, with appropriate classes, accounts, and job costing features enabled.

Time tracking integration to ensure labor costs are accurately captured and allocated to specific jobs.

Monthly job profitability reporting showing which jobs and service types are most profitable, with analysis and recommendations.

Pricing strategy consultation based on your actual job costing data, ensuring you're bidding work profitably.

Training for your team on how to consistently track time, materials, and costs so your data is accurate.

Our outsourced accounting services go beyond basic bookkeeping to provide the strategic financial insights you need to build a more profitable landscaping business. We serve contractors in San Francisco, Oakland, Berkeley, San Jose, and throughout the Bay Area.

Stop Guessing and Start Knowing: Implement Job Costing Today

Every day you operate without accurate job costing, you're making critical business decisions based on incomplete information. You might be turning down profitable work while accepting unprofitable projects. You might be marketing services that lose money while neglecting services with high margins.

The landscaping contractors who thrive long-term aren't just the ones who work the hardest—they're the ones who work the smartest, using data to make strategic decisions about pricing, services, customers, and operations.

Job costing isn't just an accounting exercise. It's a business transformation that reveals exactly where you're making money and where you're not, empowering you to build a more profitable and sustainable landscaping business.

Contact Asnani CPA today to discuss implementing a job costing system for your landscaping business. Stop guessing which projects make you money and start knowing with certainty.

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