You know a job made money when you can put the quote next to what the job actually cost in material, labour by operation, outside processing and rework, and do it within a week of the job shipping. Most small fabrication and machine shops cannot, because the quote lives in one spreadsheet, hours sit on paper timesheets, material comes off a shared rack and supplier invoices land weeks later. Nothing ties them together until year-end, when the accountant tells you the year was thinner than it felt. Here is what to compare, why the numbers drift, and the least you need to track to see it job by job.
What Job Costing Means in a Shop
Job costing is a simple comparison done consistently: what you estimated for a job against what it actually took, broken into the same buckets on both sides. If the quote says 14 hours of welding and the job took 22, you want to see that line, not just a total that came in a bit high.
For most fabrication and machine shops the buckets are the same handful:
- Material, including drops and scrap you could not reuse
- Labour by operation: cutting, fitting, welding, machining, finishing and assembly
- Machine time, where a machine and not a person is the constraint
- Outside processing such as powder coating, galvanizing, plating or laser cutting
- Rework and remakes, each with a reason
- Shop overhead, applied as a rate per labour or machine hour
Why the Quote and the Actuals Never Line Up
In most shops the gap is not bad estimating. It is information that never reaches the job:
- Hours are logged to the day, not to the job, so a fitter's eight hours get split from memory on Friday.
- Material is pulled from stock without a job number, so the job that used the last sheet of plate never pays for it.
- Remakes are fixed quietly on the floor and never recorded, so the same mistake costs you every month.
- The customer changes a dimension by phone, the shop builds the new version, and the quote is never updated.
- Outside processing invoices arrive weeks after the job ships, when nobody looks back.
An Illustrative Example
These numbers are illustrative, to show the method, and do not come from any one shop. Say you quote a run of steel brackets at 40 shop hours and $3,000 of material, priced for a healthy margin.
The job ships on time and the customer is happy. When you finally pull it together, it took 52 hours, because the first fit-up needed rework and six brackets were remade after a hole pattern was drilled to the old drawing. Material came to $3,400 once the extra plate and drops were counted, and the powder coating invoice was higher than the estimate. Nothing went badly wrong, yet most of the margin is gone.
Without job costing you never see it, so you quote the next run the same way. With it, you see the extra hours sitting in fit-up and remakes, and you either fix how drawings reach the floor or price the risk in.
The Minimum You Need to Track
You do not need a full ERP to start. You need a job number that follows the work everywhere:
- Every timesheet line carries a job number and an operation, entered at the station or on a phone, not rebuilt on Friday.
- Every material issue from stock is recorded against a job, including drops that go back on the rack.
- Every purchase order for outside processing or job-specific material carries the job number, so the invoice lands on the right job.
- Every remake gets a reason: drawing error, machine setup, material defect or handling damage.
- Every change the customer asks for after the quote is written down and priced before the shop builds it.
- Every job gets a five-minute close-out review: quoted versus actual, bucket by bucket.
Spreadsheet, Shop Software or a Custom System?
A well-kept spreadsheet can carry a shop doing a handful of jobs a week with one person quoting. It breaks when several people touch the same job, when the shop runs repeat work and one-offs side by side, or when nobody has time to keep it current.
Off-the-shelf shop management or ERP software fits when your process looks like the one the software was built around. An ERP such as Odoo or ERPNext can be implemented and customised, and for many shops that is the right answer. We set out both routes, custom and implemented, at /erp-implementation.
A custom system makes sense when the way you quote, schedule and track jobs is part of what makes the shop good, and generic software would force you to work around it. Then the quote, the traveller, the time entries, the material and the invoice live on one job record, connected to the accounting system you already use.
Where AltaMatic Fits
AltaMatic (formerly AltaPro AI) builds the operations software manufacturers and fabrication shops run on: quoting, job tracking, shop-floor time capture and job costing in one system, connected to your accounting. The manufacturing scope is at /manufacturing-software. To see where your own cost data gets lost first, the map at /tools/job-to-cash-map walks a job from quote to payment.