This is an extract from a case study provided by Best Software, a company in the Sage group. It provides an example of a job cost system in a service business.

Fulcrum Lighting Ltd specialises in the creative design and implementation of lighting and power systems for applications ranging from live events, exhibitions and themed environments to retail outlets, bars, restaurants, leisure developments and private homes.

It is a client-focused company, which strives to exceed clients’ expectations in the quality of service that it provides. The aim is to build a long-term relationship with customers, to offer personal service, and to develop and extend the effective use of lighting and power within client projects.

The typical job cycle at Fulcrum starts with a request for quotation, which the engineers develop using Exordia Job Costing; in many cases deploying previously designed templates (which are simply edited) to speed the job planning and estimating process. When the customer accepts the quotation, it is converted to a job and purchase orders are raised within the program for the procurement of bought in materials and services. Costs are collected, mainly from supplier invoices, and logged against the job. Finally, Exordia Job Costing is used to invoice the work to the customer and the details are automatically transferred to the customer files in the Sage accounting program.

Questions

1 What kinds of jobs are carried out in this business?
2 Why is it important to have accurate job costs?