Definition: A job is simply the process of making a custom product. Each job will be different and have different requirements based on the custom product. Going back to our Fender example, each job will be slightly different. The guitars will be different colors, have different finishes, and have different specifications. These guitar jobs will all slightly differ, as do the products they produce.
What Does Job Mean in Accounting?
In a job order production system, a company produces custom products for individual customers. In other words, each product is made to order. No product is mass produced. A great example of this is the Fender Guitar Custom Shop.
Each guitar that leaves the Fender Custom Shop is a one of a kind guitar. These guitars are custom ordered by individual guitarists and companies. No two guitars are alike and no two guitars have the same production requirements.
Jobs do not only apply to production processes. Service based industries can also have jobs. A service job starts the same exact way a production job starts. A client or customer puts in a custom order. The service provider then performs the custom work for the client. A good example of a service job is an accounting audit. Auditing firms are employed by clients to perform audit procedures.
Some audits involve auditing financial statements, while other audits only involve inventory. Every audit is different and every audit performed requires different procedures and different amounts of time.
The key concept of a job is customization. It doesn’t matter whether the job is a production job or a service job, each job must be custom and require custom processes.