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January 12, 2023
Job Costing in Print Companies is more important than ever by Jane Mugford & Danielle Jackson |
Owning a print company is not for the faint of heart. It is a continuously evolving ecosystem where costs are volatile, labor can be hard to find and technology is a continuous “secret sauce recipe” that you have to keep up with. Jobs are more transactional than they have ever been. The Print world is booming and you cannot doubt the power of it. However, to thrive and grow, you need to recognize that your leadership team needs to develop a culture of Job Costing respect and compliance.
Why is Job Costing so critical?
Quite simply without it, you are losing profit opportunities. That’s right, profit opportunities!
Think about this. When something dramatically and negatively impacts your bottom-line (i.e. you start experiencing losses) it’s often all hands-on deck to pay attention and cut costs. Whether it be a global situation like Covid, or a more specific situation like the loss of a large account, your team knows to hunker down and cut costs where possible to weather these storms. When times are good and you’re making money, you tend not to be as focused on how to trim costs. And this is where the missed profit opportunity comes in.
Whether in good times or bad, Job Costing is a gateway to profit. Most commonly companies focus on the “general and administrative” (G&A) places they know they can cut costs. But leveraging Job Costing will give you the ability to tackle costing challenges even more directly.
What tools do you need for Job Costing?
First and foremost you must have a Print Management Information System (MIS) to become successful with Job Costing. It’s non-negotiable in this day and age of quick and complex digital print to try and do Job Costing without it. So the technology gets you 70% of the way there.
Then there is a very critical 30% which is attributable to the “human factor”. This starts with leadership. If the leadership team does not promote, endorse, support and expect a cultural environment of Job Costing compliance then success at leveraging profit opportunities will not be achieved. It needs to be the expectation of every employee to participate fully in this culture. The best technology in the world won’t lead to success otherwise.
Is Job Costing hard to maintain?
No. But it doesn’t run itself and it takes effort. What do you need?
Treat yourself to Job Costing Success
When you have a program in place that supports your Job Costing technology, and you have a culture that embraces Job Costing reporting and data, you will be astounded by the impact to your bottom line. In this day and age, it shouldn’t be considered anything but an essential and critical business tool for commercial Print companies.
Why is Job Costing so critical?
Quite simply without it, you are losing profit opportunities. That’s right, profit opportunities!
Think about this. When something dramatically and negatively impacts your bottom-line (i.e. you start experiencing losses) it’s often all hands-on deck to pay attention and cut costs. Whether it be a global situation like Covid, or a more specific situation like the loss of a large account, your team knows to hunker down and cut costs where possible to weather these storms. When times are good and you’re making money, you tend not to be as focused on how to trim costs. And this is where the missed profit opportunity comes in.
Whether in good times or bad, Job Costing is a gateway to profit. Most commonly companies focus on the “general and administrative” (G&A) places they know they can cut costs. But leveraging Job Costing will give you the ability to tackle costing challenges even more directly.
- Did you give a wage increase out in October and by January you still haven’t updated your budgeted hourly rates? Then you will have taken a profit hit.
- Have you been estimating your press speeds at “x impressions per hour” only to find out you’ve been running at “x -10%” in the last several months? You will most likely find you’ve been losing money on these jobs.
What tools do you need for Job Costing?
First and foremost you must have a Print Management Information System (MIS) to become successful with Job Costing. It’s non-negotiable in this day and age of quick and complex digital print to try and do Job Costing without it. So the technology gets you 70% of the way there.
Then there is a very critical 30% which is attributable to the “human factor”. This starts with leadership. If the leadership team does not promote, endorse, support and expect a cultural environment of Job Costing compliance then success at leveraging profit opportunities will not be achieved. It needs to be the expectation of every employee to participate fully in this culture. The best technology in the world won’t lead to success otherwise.
Is Job Costing hard to maintain?
No. But it doesn’t run itself and it takes effort. What do you need?
- You need a program of managing and updating day-to-day costs like inventory.
- You need a formal schedule of ensuring Budgeted Hourly Rates (BHR’s) are reviewed and updated at least annually to adjust for G&A changes and such.
- You need a plan for updating your system when key attributes to do with your manufacturing change: wage increases, new equipment acquisitions, changes to rental rates.
- You need a plan to review Job Cost data daily. “Death by job costing” is the belief that you need to review every job in great cost detail – that will kill any Job Costing program so fast. Get yourself some good reports to show you Job Cost data, and to flag exceptions. Then have a plan for how those get reviewed, investigated and resolved.
Treat yourself to Job Costing Success
When you have a program in place that supports your Job Costing technology, and you have a culture that embraces Job Costing reporting and data, you will be astounded by the impact to your bottom line. In this day and age, it shouldn’t be considered anything but an essential and critical business tool for commercial Print companies.