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TL;DR: SPM provides fractional CFO services for grading contractors doing $1M-$12M in commercial new construction. Job costing by cubic yards of cut and fill in ControlQore, overhead rate including all real costs, WIP reporting monthly, and AR collection system that clears the backlog in 30 days. Most grading clients find their first month's AR collection exceeds the annual SPM fee.
Grading
The CFO for
Grading Contractors.
You bid by the cubic. Your margin lives or dies in the field every week. If you find out a job is losing money at closeout it is too late. We make it visible in week two.
Published: May 2026 · Updated: May 2026
The Problem
What Kills Grading Margins
Most grading do not know a job is losing money until it is done. The estimate looked right. The crew was working. But the actual cost per cubic yards of cut and fill was running over estimate for three weeks and nobody knew it until closeout.
01
Cut-Fill Variance Discovered at Grade Completion
The grade design showed balanced cut-fill. The actual soil conditions produced 40% more cut than fill. You hauled 2,400 CY off-site at $18/CY. That is $43,200 in costs not in the estimate and not documented as a changed condition until the job was done.
02
Equipment Idle Rate Absorbed Into Overhead
A motor grader and scraper running at 55% utilization have fixed ownership costs that run at 100%. That idle rate - $2,800/month on a grader - disappears into overhead as unidentified margin erosion unless tracked by machine.
03
Grade Design Changes Without Change Orders
The civil engineer revised the grading plan three times during construction. Each revision added work. The GC said the contract covers design development. You absorbed $67,000 in additional work because the changes were not documented as scope additions at the time they occurred.
Prevailing wage note: Grading contractors doing DOT and municipal work have additional fringe benefit requirements of $12-$20/hour above base wages. SPM calculates separate overhead rates for prevailing wage and private work. Prevailing wage CFO services →
FAQ
Frequently Asked Questions
What does a CFO for grading contractors do?
A fractional CFO for grading contractors builds the job costing structure aligned to the estimate - cost codes by cubic yards of cut and fill - so actual cost per unit is visible weekly against estimated cost per unit. They manage WIP reporting, overhead rate calculation, billing calendar, and monthly cash flow. The result: you know which jobs are winning and which are losing before you cannot do anything about it. All SPM clients run on ControlQore - purpose-built for construction job costing at $1M-$12M.
What overhead rate should grading contractors use?
Grading Contractors at $1M-$3M typically run 14-16% overhead. The most common errors are missing owner compensation at market rate and not including equipment depreciation or vehicle fleet in the SG&A calculation. Each of those understates the real overhead rate and underprices every bid.
What are the most common cash flow problems for grading contractors?
Three consistent problems: schedule of values that underbills early phases which are the most cash-intensive work, overhead rate below actual because ownership costs are not fully included, and AR sitting uncollected at 45+ days with no follow-up system. Most grading contractors have all three simultaneously. SPM fixes all three in the first 60 days.
What gross margin should grading contractors target?
Grading Contractors at $1M-$12M in commercial new construction typically target 18-23% gross margin. Margin below the lower end of that range usually indicates a markup problem, an overhead rate understatement, or job costing that is not capturing all direct costs accurately.
Do you handle payroll?
No. SPM does not handle payroll. We have vetted partners including prevailing wage and Davis-Bacon integrations that connect directly with ControlQore at additional cost.
How long does onboarding take?
60 days. We migrate your books to the start of your last taxable year, build your ControlQore job costing structure, and get you fully operational in two months.
What software do you use?
All SPM clients run on ControlQore - purpose-built for construction job costing and WIP reporting at $1M-$12M. More capable than QuickBooks for job costing, more affordable than Sage. We set it up and manage it.
Do I need clean books to start?
No. Most clients come with messy books and no job costing. That is exactly what onboarding is for.
