Discuss the use of job order costing for professional services businesses. What are the similarities and differences between service and manufacturing business job order costing?

Professional service providers-attorneys, physicians, advertising agencies, etc.-may use job order cost accounting systems. In such cases, clients are considered jobs.​
Like manufacturers, direct labor and overhead costs for service companies are accumulated in work in process accounts. Unlike manufacturers, materials costs for service companies are usually insignificant and treated as overhead. When a job is completed, it is transferred to Cost of Services, which is similar to Cost of Goods Sold. Service companies do not use finished goods accounts.