WHY PROCESS PIPING CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Process Piping margin is lost to three specific things: the dossier half, the lapsed ticket, and the five percent trigger. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Process piping contractors at $1M to $5M net 6.5 percent on the SPM 48-trade dataset, rising to 9.5 percent by $25M to $50M; the CFOS target at $1M to $5M is 10 percent. The distance between the trade average and the CFOS target isn't a pricing problem in this trade. It sits in the three mechanisms below, each of which moves margin without appearing as a failure on any single job. The pipe is half the product; the legally binding traceability package is the other half, and hydrotest sign-off waits on it. Documentation labor billed and built weld-by-weld is the trade's collection strategy.
THE MATH BEHIND THE MISSING CASH.
The Dossier Half
The pipe is half the product; the legally binding traceability package is the other half, and hydrotest sign-off waits on it. Documentation labor billed and built weld-by-weld is the trade's collection strategy.
The Lapsed Ticket
Six months without a qualified process and the welder's qualification dies quietly, surfacing at audit as rework on finished welds. The qualification matrix is a financial control; run it weekly.
The Five Percent Trigger
Sampled examination means one failed weld expands into a welder's whole lot. Repair rates tracked by welder and process are the early-warning system, and reject economics belong in every alloy bid. (cfos-job-profitability-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 24% | 25% | 26% |
| Gross margin, CFOS target | 25% | 25% | 26% |
| Net profit, industry average | 8% | 10% | 12% |
| Net profit, CFOS target | 10% | 11% | 13% |
| Overhead, industry average | 16% | 15% | 14% |
| Overhead, CFOS target | 15% | 14% | 13% |
Industry figures are Process Piping contractors' AVERAGE for each revenue band, not a floor. The CFOS net profit target is set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher, and the gross margin target is set at whatever gross margin produces that net profit once your overhead is paid, and never below your trade's own average. Gross minus overhead equals net on every column, so the rows tie out. The gross margin and overhead figures for this trade are derived from the nearest comparable trade in the same dataset, and were not measured directly.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
