Landscaping job costing determines whether projects actually make money or just keep crews busy. Most landscape companies know their total revenue, but they can't identify which specific jobs are profitable and which ones are bleeding money.

It isn't just about knowing what was spent. It's about understanding real costs per project to price landscaping jobs correctly, identify which landscaping services generate actual profit, and stop taking landscaping work that looks good on paper but loses money in reality.

Keep reading to learn about job costing systems that work in real landscaping operations.

Why Job Costing Matters More Than Revenue

Tracking total revenue feels good, but it doesn't tell you where your profit comes from. Weather delays stretch project timelines, equipment breaks down during installations, and labor costs vary dramatically between crew members and project types.

Without accurate job costing, you can't answer the questions that determine long-term success:

• Which landscaping jobs consistently make money?

• What's our real labor cost per crew hour on different job types?

• Are we pricing our landscaping services to cover actual costs and the desired profit margin?

• Which crews complete similar jobs most efficiently?

• Where are we losing money without realizing it?

• Are our cost estimates matching actual costs on completed projects?

Commercial maintenance contracts often look profitable on paper. They have solid monthly billing, beautiful properties, clients who pay on time, etc. But some landscaping businesses discover months into these contracts that drive time, difficult site access, and higher-than-expected labor hours turn seemingly profitable work into money-losing obligations. Other companies might have found a way to execute these contracts profitably. It's all about learning what works best for your company and where you operate best. 

Most landscaping businesses face similar challenges when it comes to this because they focus on winning more business instead of understanding which landscaping work generates profit for their business.

Understanding Direct and Indirect Costs

Job costing tracks two types of expenses: direct costs that you can attribute to specific projects and indirect costs (overhead) that keep your business running but don't tie directly to individual jobs.

Direct Costs

Direct Labor Costs

This includes wages, payroll taxes, and benefits for crew members working on specific landscaping projects. For a landscape installation, you track every labor hour your crew spends on that job site, including drive time, setup, actual installation work, and cleanup.

Many landscape companies track direct costs by crew day or week, but this creates accuracy problems. A crew might work on three different landscaping jobs in one day. If you're not tracking labor hours by project, you're guessing at your real labor costs.

The total labor cost for any job should reflect your fully burdened hourly rate - not just wages, but all employee-related expenses. When you calculate labor costs accurately, you avoid the common mistake of underbidding landscape jobs because you forgot to include payroll taxes and workers' compensation insurance.

Material Costs

Track every plant, bag of mulch, paver, and supply used on each landscaping project. This seems obvious, but many landscaping companies track materials in bulk purchases without allocating them to specific landscape jobs. When you don't know what material cost actually went into a project, you can't accurately cost that job or learn from it for future estimates.

Accurate material tracking requires discipline. You need accurate measurements of material quantities for every job, and you need systems to prevent small costs from disappearing. Those forgotten bags of topsoil or extra hardscape supplies add up quickly across many jobs.

Track the cost of materials as they're purchased and allocated to specific jobs, not days later when someone's trying to remember which landscaping work used what supplies. This documentation becomes essential for comparing your cost estimates against actual costs on completed jobs.

Equipment Costs

Equipment costs for specific landscaping jobs include equipment rental fees for specialized machinery, fuel costs, and wear-and-tear allocation for owned equipment. If you use a skid steer on an installation project, that job should carry its proportional share of the equipment operating costs including fuel, equipment repair, and maintenance.

Small costs matter here. Fuel costs for trucks and equipment represent significant expenses across all your landscape jobs, but many business owners don't allocate these costs properly. Track fuel consumption per job site to understand real equipment expenses.

Equipment rental for specialized projects needs careful tracking too. When you rent a trencher, excavator, or specialized installation equipment for a specific landscaping project, those rental costs must be included in your job costing to understand true profitability.

Subcontractor Fees

When you hire specialized subcontractors for irrigation, lighting, or hardscape work, these costs are directly attributable to specific projects. Track them carefully because subcontractor costs can make or break project profitability.

Indirect Costs (Overhead)

Overhead includes all the costs necessary to run your landscaping business that don't directly tie to specific projects. Most small businesses underestimate how much they actually spend on overhead - typically at least 20% or more of a landscape contractor's total sales go toward these weekly overhead costs:

• Office salaries for administrative staff

• Facility rent and utilities

• Insurance (liability, workers' compensation, vehicle)

• Marketing and advertising

• Vehicle maintenance for company trucks

• Equipment storage and general maintenance

• Software subscriptions and office supplies

• Professional services (accounting, legal fees)

The challenge with overhead costs is figuring out how to allocate them across your landscaping jobs. Some landscape businesses use a simple percentage markup on direct costs, while others calculate overhead allocation based on labor hours or project complexity.

Understanding your weekly overhead cost helps you determine the right pricing strategy. If you don't allocate overhead costs to each job, you'll consistently underprice your landscaping services even when your direct cost tracking is accurate.

Setting Up Job Costing Categories

Organize your job costing around how your business actually operates. Different service types require different cost tracking approaches.

Maintenance Contracts

For ongoing maintenance work, job-specific time tracking becomes critical:

• Labor hours per visit organized by property

• Fuel costs and equipment costs per route

• Materials used per property per month

• Weather-related delays that affect crew efficiency

• Seasonal labor variations (spring cleanup vs. summer mowing)

Maintenance contracts look predictable, but job costing reports often reveal properties where you're losing money due to difficult access, excessive drive time, or site conditions that slow crew members down. Regular review of this data helps you make better business decisions about contract renewals and pricing adjustments.

Design-Build Installation Projects

Installation projects require more detailed job costing:

• Labor hours by project phase (site prep, installation, cleanup)

• Material costs with vendor receipts and delivery fees

• Equipment costs including rental and usage

• Subcontractor invoices with payment schedules

• Permit fees and inspection costs

• Project management and supervision time

Large installation projects like retaining walls or complex hardscaping often span weeks or months. Track costs weekly to catch budget problems early, not after you've already exceeded your landscaping estimate. This weekly tracking gives you real-time visibility into job profitability and helps you identify when a landscaping project is trending over budget.

Enhancement and Seasonal Services

Enhancement sales and seasonal work (mulching, cleanups, seasonal color) need tracking that captures:

• Upsell opportunities and conversion rates

• Labor efficiency by service type

• Material costs and waste percentages

• Route density and drive time optimization

These services often generate strong profit margins when managed well, but poor tracking leads to unprofitable pricing and missed opportunities.

How to Track Job Costs Effectively

The right tracking system captures accurate data without creating administrative headaches that slow your operations.

Daily Time Tracking

Crew leaders should track time by landscaping project daily, not at the end of the week. Memory fails, and reconstructing where crews spent their labor hours leads to inaccurate data that ruins your job costing accuracy.

Mobile apps for time tracking allow foremen to clock in and out for specific properties and projects. This captures actual hours worked per job, including drive time and weather delays. Mobile apps make this process simple for crew members and ensure data flows directly into business software without manual entry errors.

The key to effective time tracking is making it easy for crew members to complete the job documentation without slowing down their work. When tracking becomes complicated, accuracy drops and your job costing suffers.

Material Tracking Systems

Track materials as they're purchased and allocated to specific landscape jobs. When your crew picks up plants and materials, those costs should be assigned to the project immediately, not days later when someone's trying to remember which landscaping work used what materials.

Accurate material tracking requires discipline from everyone. Crew leaders need clear systems for documenting material usage with accurate measurements, and your office team needs to process this information quickly to keep job costs current. Small costs like extra fasteners, additional topsoil, or unexpected supplies add up fast when you're completing many jobs per week.

This tracking also helps you identify waste and improve ordering accuracy. When you compare material quantities ordered versus materials actually needed on similar projects, you can refine future estimates and reduce excess inventory costs.

Equipment Hour Tracking

For owned equipment, calculate an hourly operating cost that includes:

• Depreciation over the equipment's useful life

• Fuel consumption per hour of operation

• Maintenance and repair costs

• Insurance and storage allocation

Track equipment hours on specific projects so you know the real cost of using that skid steer, excavator, or specialized installation equipment on each job.

Software for Job Costing

Most landscape contractors use software like QuickBooks for their accounting, which has job costing capabilities if set up correctly. However, landscape-specific business software like Aspire includes job costing features designed specifically for how landscaping companies actually operate.

This integration is critical because manual data entry between systems creates errors and wastes time. Look for business software that:

• Tracks labor hours by landscaping project automatically

• Allocates material purchases to specific jobs

• Calculates equipment costs per project

• Generates real-time job costing reports

• Compares estimated costs to actual costs

• Creates profit and loss statements by project type

• Provides mobile apps for field data collection

Good software gives you a competitive edge by making job costing routine instead of overwhelming. The time you save on administrative work lets you focus on analyzing the data and making better business decisions about pricing and resource allocation.

Read our Blog: Bookkeeping for Landscaping Businesses

Calculating Your Break-Even and Profit Margins

Once you're tracking job costs accurately, calculate what you actually need to charge to break even and generate your desired profit margin. This is where many landscaping businesses fail - they track costs but don't translate that data into competitive pricing that actually covers expenses.

Break-Even Calculation

Your break-even point covers all direct costs plus your proportional share of overhead. For a landscape installation project, this might look like:

Track Direct Costs:

• Labor: $3,200

• Materials: $2,800

• Equipment: $600

• Subcontractors: $1,500

Total Direct Costs: $8,100

Overhead Allocation:
If your overhead runs 25% of direct costs: $2,025

Break-Even Total: $10,125

Any total price below $10,125 means you're losing money on this actual job, even if it feels profitable when you only look at direct costs. This is the minimum total cost before you add your markup for profit.

Target Profit Margins

Different landscaping jobs support different profit margins based on market conditions and competition. Understanding these benchmarks helps you develop a pricing strategy that balances competitive pricing with profitability:

• Maintenance contracts: Generally lower net profit margins but provide steady, predictable revenue
• Design-build installations: Stronger net profit margins due to specialized expertise required
• Enhancement services: Good net profit margins with opportunity for upselling existing clients
• Emergency or specialty services: Highest net profit margins reflecting urgency and specialized skills

These ranges vary significantly by market, and the national average may differ from your local conditions, but job costing helps you understand whether your actual margins match industry targets or if you're leaving money on the table (or worse, losing money without realizing it).

When you price landscaping work, add your markup after accounting for all total costs. Many landscaping companies fail because they calculate their price based only on direct costs and forget to include overhead allocation in their pricing model. This leads to winning lots of jobs while slowly going out of business.

Read our Blog: Profit Margins for Landscaping Businesses Explained

Using Job Cost Data to Improve Estimates

Job costing's real value comes from using historical data to create accurate estimates for future landscaping jobs. This is where most landscape businesses fail. They track costs but don't analyze them to improve their estimating accuracy and pricing landscaping work.

Compare Estimated vs. Actual Costs

After completing projects, compare your cost estimates to actual costs across every category:

• Labor hours estimated vs. hours actually worked

• Material cost budgeted vs. materials actually used

• Equipment hours projected vs. hours actually needed

• Timeline estimated vs. actual project duration

These comparisons reveal consistent patterns that help you estimate landscaping jobs more accurately. Maybe you consistently underestimate labor hours on paver patios, or you're overestimating material costs on planting projects. These insights make your next landscaping estimate more accurate and help you maintain your desired profit margin across all your landscape jobs.

Identify Cost Drivers and Key Variables

Analyze which factors most affect your landscaping costs across different landscape jobs:

• Job site access challenges that slow crew members down

• Soil conditions requiring extra prep work

• Weather delays during specific seasons

• Learning curves on new project types

• Subcontractor reliability and scheduling

• Distance from your facility affecting fuel costs and labor hours

Understanding these key variables helps you estimate more accurately and identify which factors you can control to improve job profitability. For example, if difficult job site access consistently adds 20% more labor hours on similar projects, you can factor that into future estimates for comparable landscape work.

This analysis also reveals opportunities to complete the job more efficiently. Maybe certain crew members perform better on specific types of landscaping work, or certain times of year are more profitable for particular landscaping services.

Build Estimating Templates for Profitable Work

Use job cost data to create estimating templates for common landscaping jobs. When you know that paver patio installations average X labor hours per square foot and Y material cost per square foot in your market, you can estimate new projects faster and more accurately. This helps you respond quickly to potential customers while maintaining accuracy.

These templates should include historical data from similar jobs:

• Labor hours per unit of work based on actual completed projects

• Material costs with current vendor pricing

• Equipment requirements and hours

• Typical change order frequency

• Profit margins that actually work in your market

• Common variables that affect final price

Good estimating templates give you the right balance between speed and accuracy. You can respond to potential clients quickly with confident pricing because you know your numbers are based on real data from jobs you've actually completed, not guesswork.

Read Our Blog: How to Estimate a Landscaping Job Correctly

Common Job Costing Mistakes

Most landscape companies make predictable errors when they start job costing. Here's what to avoid:

Incomplete Labor Tracking

Tracking some labor hours but not all of them creates incomplete data that misleads your analysis and pricing of landscaping work. Drive time between jobs, meetings, equipment repair and maintenance, and administrative work all represent real labor costs that need allocation.

Many landscape contractors only track "productive" hours on the actual job site, but your crew member's day includes much more than direct installation time. If you're not capturing these hours somewhere in your job costing, you're consistently underestimating your true labor cost and underbidding landscape jobs as a result.

Forgetting Overhead Allocation

Calculating profitability based only on direct costs ignores your overhead. A project might show a positive direct contribution but still lose money when you properly allocate overhead expenses.

Tracking Data Without Analysis

Collecting job cost data means nothing if you don't analyze it and make better business decisions based on what you learn. Many landscaping businesses have years of cost data sitting in their business software that they never use to improve their landscaping estimate accuracy or identify unprofitable work.

Set aside time monthly to review job costing reports. Look for patterns across similar jobs, identify where your most profitable work comes from, and understand which landscaping services consistently underperform. This analysis transforms raw data into actionable insights that help you win more profitable work instead of just more business.

Using Inaccurate Equipment Costs

Operating equipment costs more than fuel. Depreciation, maintenance, insurance, and storage all represent real costs that need allocation to projects using that equipment.

Ignoring Small Costs

Small costs add up fast. Hardware, supplies, disposal fees, and incidentals seem insignificant on individual projects but represent real money across your annual job volume.

Building Profitability Through Better Job Costing

Accurate job costing provides the foundation for profitable landscaping businesses. Landscape companies that understand their real costs per project make better business decisions about pricing strategy, which landscaping services to emphasize, and which opportunities to pursue.

Focus on systems that capture accurate data without creating administrative burdens. The goal isn't perfect precision but sufficient accuracy to identify which landscape jobs make money and which ones don't.

Regular analysis helps identify trends before they become problems. Monthly reviews of job cost data across your service offerings reveal where you're succeeding and where adjustments are needed to maintain your desired profit margin.

When you know your numbers, you can price confidently, bid strategically on profitable work, and build a more successful landscape business based on data instead of gut feelings. This knowledge helps you serve customers better while ensuring every landscaping project contributes to your business growth and profitability.

About The Grow Group

The Grow Group helps landscaping business owners clarify their platform, grow their people, build their processes, and realize profits. Led by Marty Grunder, our team remains actively involved in running Grunder Landscaping Company while helping hundreds of landscape professionals transform their businesses nationwide.

What Sets Us Apart: We don't share theories – we share tactics we tested this week at Grunder Landscaping Co., our "living laboratory." Every system we recommend gets proven there first.

Key Programs:

• GROW! Annual Conference – Our flagship event delivering actionable strategies, hands-on workshops, and valuable networking opportunities
• ACE Peer Groups – Join other owners who become your board of advisors, meeting quarterly in-person with monthly accountability calls facilitated by executive coaches

Frequently Asked Questions

What is job costing in landscaping?

Job costing is the process of tracking all expenses associated with specific landscaping projects and comparing those costs to the revenue generated. This includes tracking direct costs like labor hours, material costs, and equipment costs, plus allocating overhead costs to understand total job profitability. Accurate job costing helps landscape contractors determine which landscaping jobs are profitable and identify opportunities to improve pricing and efficiency on future landscape work.

How do you calculate labor cost for landscaping jobs?

Calculate the total labor cost by multiplying crew hours worked on a specific landscaping project by your fully burdened labor rate - which includes base hourly rate plus payroll taxes, workers' compensation insurance, and benefits. Track all labor hours including drive time, site preparation, actual installation work, and cleanup to capture accurate labor costs. Most landscaping businesses underestimate labor costs by forgetting to include these additional expenses beyond base wages.

What should overhead allocation be for landscape jobs?

Most landscaping companies allocate overhead at 20-30% of direct costs, though this varies based on your specific business structure and weekly overhead costs. Calculate your actual overhead percentage by dividing your annual overhead expenses by annual direct costs to determine what allocation rate makes sense for your landscape business. Many small businesses underestimate their overhead costs, leading to unprofitable pricing even when they track direct costs accurately.

How can job costing improve landscaping profitability?

Job costing reveals which landscaping services and project types generate real profit versus which landscape jobs lose money, helps identify cost overruns before they become major problems, and improves estimating accuracy for pricing landscaping work through comparison of cost estimates versus actual costs on completed projects. This data helps landscape contractors make better business decisions about which landscaping jobs to pursue and how to price their landscaping services for profitable work.

What's the difference between job costing and estimating?

Estimating projects future costs before starting work, while job costing tracks actual costs as projects proceed and after completion. The comparison between estimates and actual job costs improves future estimating accuracy and identifies consistent areas where costs differ from expectations.