Construction & trades · 🇺🇸 United States
Every job looked profitable until the year ended
A remodeler with no job costing priced new work from a gross margin that turned out not to exist.
US residential contractor, 6 crews, 20–30 jobs live. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
28
Live jobs costed
17%
Gap between quoted and actual margin
Per-job
Reporting introduced
The situation
- The contractor quoted from a standard margin assumption and tracked profitability only at company level, annually.
- Cash felt tight in a year the P&L said was good.
What we found
- Material purchases were not allocated to jobs, so no job had a true cost.
- Change orders were performed and frequently never invoiced.
- Crew time was recorded for payroll but never against jobs, so labour cost per job was a guess.
What we did
- Introduced job costing with materials and labour allocated at the point of entry.
- Built a change-order log tied to invoicing so approved variations get billed.
- Produced per-job margin reporting reviewed weekly rather than annually.
The outcome
- Actual margin ran roughly 17 points below the quoting assumption, which changed how new work was priced immediately.
- Unbilled change orders alone were worth more than the engagement cost in the first quarter.
What we'd flag
Getting crews to log time against jobs took three months and constant reinforcement. The data was unreliable until it wasn't.
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