# Job Shop Costing Maturity Assessment > Source: https://netray.co/tools/job-shop-costing-maturity-assessment > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer Score how reliably your shop knows its cost, from burden and machine rates to estimate feedback, and get a prioritized list of improvements. ## Category cost-finance ## Industry Job Shop Machining ## Audience - Shop owner - Controller - Estimator - Operations manager ## Tool **Kind:** assessment **Questions:** #### How is your shop labor and overhead rate set? **Help:** Think about the number your estimators actually use today. **Options:** ##### Copied from a competitor or an old number **Score:** 0 ##### One blended rate set by the owner from experience **Score:** 1 ##### One blended rate calculated from last year's financials **Score:** 2 ##### Rates by cost center or machine, recalculated at least annually **Score:** 3 #### How do you treat utilization when setting rates? **Options:** ##### We assume every paid hour is billable **Score:** 0 ##### We assume a round number without checking **Score:** 1 ##### We measure it overall from time tracking **Score:** 2 ##### We measure it by machine or center and update the rates **Score:** 3 #### How are machine costs (depreciation, power, tooling) handled? **Options:** ##### They are not separated from general overhead **Score:** 0 ##### Only for one or two large machines **Score:** 1 ##### Machine hour rates exist for most capital equipment **Score:** 2 ##### Machine hour rates exist, are reviewed yearly and drive routings in the ERP **Score:** 3 #### How consistently do you compare estimated to actual job cost? **Options:** ##### Never **Score:** 0 ##### Only when a job obviously lost money **Score:** 1 ##### Routinely for larger jobs **Score:** 2 ##### On every closed job, with variance causes recorded **Score:** 3 #### How do estimates get corrected after a miss? **Options:** ##### They do not; we just remember it **Score:** 0 ##### The estimator adjusts informally next time **Score:** 1 ##### Standards or routings are updated when a pattern appears **Score:** 2 ##### A formal review feeds standards, with the change tracked and checked on the next order **Score:** 3 #### Do you know whether you use markup or margin in quotes? **Options:** ##### Not sure; different estimators do different things **Score:** 0 ##### Markup, but we have not checked the resulting margin **Score:** 1 ##### One method with a written policy **Score:** 2 ##### One method, a written policy and reports of realized margin **Score:** 3 #### How well do you track quote outcomes? **Options:** ##### We do not track them **Score:** 0 ##### We know roughly how many we win **Score:** 1 ##### We log wins and losses in a spreadsheet **Score:** 2 ##### We log outcome, margin and loss reason, and review monthly **Score:** 3 #### How are small and rush orders priced? **Options:** ##### Same as any other order **Score:** 0 ##### Case by case, by feel **Score:** 1 ##### Minimum charge or rush fee exists but is often waived **Score:** 2 ##### Policy based on cost, applied in the ERP, waivers logged **Score:** 3 #### How trustworthy is the labor and material data in your ERP or job system? **Options:** ##### We do not track time against jobs **Score:** 0 ##### Time is entered after the fact and often wrong **Score:** 1 ##### Time is mostly captured on the floor with some gaps **Score:** 2 ##### Time and material are captured at the job and operation, and reconciled **Score:** 3 #### How often do you reconcile absorbed overhead to actual overhead? **Options:** ##### Never **Score:** 0 ##### At year end only **Score:** 1 ##### Quarterly **Score:** 2 ##### Monthly, with rate adjustments when the gap persists **Score:** 3 **Bands:** #### Pricing by instinct **Min:** 0 **Max:** 30 **Verdict:** Your costs are largely unmeasured, so quotes are guesses with confident formatting. That works until volume or mix changes. **Recommendations:** - Calculate a single shop rate from last year's financials and billable hours. - Start recording actual hours against every job. - Decide on margin or markup and write it down. #### Basic controls in place **Min:** 31 **Max:** 55 **Verdict:** You have a rate and some tracking, but feedback from actuals to estimates is weak and variances stay hidden. **Recommendations:** - Review estimate versus actual on every job above a set dollar value. - Separate machine hour rates for your largest capital equipment. - Log quote outcomes and loss reasons. #### Managed costing **Min:** 56 **Max:** 80 **Verdict:** Rates are calculated and used and you learn from actuals. The remaining gains are in consistency and automation. **Recommendations:** - Reconcile absorbed and actual overhead monthly. - Tie standards updates to post-job reviews. - Report realized margin by customer and process. #### Data-driven pricing **Min:** 81 **Max:** 100 **Verdict:** Your shop knows its cost and uses feedback to tune it. Focus on keeping data quality high as volume and mix grow. **Recommendations:** - Audit time capture quality twice a year. - Test price sensitivity by customer segment. - Use history to flag quotes that look low versus similar past jobs. ## Content **Intro:** Pricing quality depends on cost quality. This ten-question assessment checks the foundations a job shop needs to know what a job really costs: rate setting, utilization, machine costs, feedback from actuals, quote discipline and data in the ERP. Your score points to the next improvement worth making. **Sections:** #### How to use it **Body:** Answer for what the shop does today, not what it intends to do. Each question is scored from zero to three, and your total converts to a percentage that falls in one of four bands. Run the assessment with the estimator and the controller together; owners and estimators often rate the same practice differently, and the disagreement is informative. #### What the questions measure **Body:** The first three questions look at how rates are built: blended or by center, with realistic utilization, with machine costs separated. The next three cover feedback: comparing estimate to actual, correcting standards and using a consistent pricing language. The last four cover commercial discipline and data: quote tracking, small and rush order policy, time and material capture, and reconciling absorbed overhead to actual spend. #### Reading your band **Body:** A low score does not mean the shop is unprofitable; it means profit depends on luck and mix rather than design. Mid-range shops usually have a decent rate but weak feedback, which is where most hidden margin leaks sit. High scorers benefit most from automation, so the data stays accurate without extra effort. Retake the assessment every six months to see whether changes moved the score. #### Common blind spots **Body:** Shops often score themselves high on rates and low on feedback without noticing the link: a perfect rate applied to inaccurate times still produces a wrong quote. Another blind spot is time capture; a rate is only as good as the hours behind it. If you answered zero or one on data quality, fix that first, because every other improvement depends on it. **Cta:** Netray can help you move up a band by connecting job, labor and quote data in your ERP so the feedback loops in this assessment run automatically. **Faq:** #### Is this assessment specific to machine shops? **Answer:** It is written for job shops with routings, machine or work center rates and quoting, which includes machining, fabrication and similar make-to-order work. The principles apply in any custom manufacturing environment with repeat estimating. #### What score should we aim for? **Answer:** Progress matters more than a target. Moving from the first to the second band usually produces the largest financial gain because it replaces guesses with measured rates and basic feedback. Beyond that, focus on the weakest question rather than the total. #### Who should answer the questions? **Answer:** Ideally the estimator, controller and production manager together. People close to quoting tend to rate the shop higher on rate setting, while those close to the floor rate data quality more honestly. Differences between answers point to where the process is unclear. #### How quickly can a shop move up a band? **Answer:** Most shops can move one band in a quarter by calculating a shop rate, starting job time capture and holding monthly post-job reviews. Moving into the top band takes longer because it depends on clean ERP data and discipline over many months. ## Search terms job costing maturity assessment, machine shop costing self assessment, how accurate is my job costing, shop costing audit checklist, estimating accuracy assessment, manufacturing cost accuracy score, job shop pricing maturity, costing health check --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json