In an earlier column, I argued that job costing in its current form is not an effective cost and performance management tool for many digital printing companies.  Broadly defined, job costing is the process of assigning costs to individual print jobs or orders.  Printing companies use job costing principles and methods both to estimate the costs of prospective jobs and to calculate the actual costs of completed jobs.  Job-oriented costing systems have been core management tools for printing companies and other custom manufacturing or “build-to-order” businesses for decades.

Despite their long-standing use in the printing industry, conventional job costing systems don’t fit the needs of many digital printing companies.  The ultimate value of any costing system depends on how effectively it provides support for making smart business decisions.  To provide such support, a costing system must be designed and structured to match what a company does and how it operates.

Print job costing systems were developed to meet the needs of “traditional” commercial printing companies.  Although traditional commercial printing companies differ in several ways, they tend to share two basic characteristics.  First of all, even today, most traditional printing companies derive the vast majority of their revenues from print manufacturing services (prepress, press, and bindery).  And second, the core “deliverables” provided by these companies are individual print jobs.  Therefore, it should not be surprising that print costing systems focus on print manufacturing costs and on individual print jobs.