YOUR JOBS LOOK PROFITABLE.
THEY MIGHT NOT BE.
Job profitability breaks down when actual cost is only compared against the bid at closeout, not weekly while the job is still running. By the time a losing job shows up on the P&L, there's nothing left to do about it. CFOS replaces closeout-only cost review with weekly job cost variance tracking while jobs are still active.
A job can be won at a healthy margin and still lose money, and most contractors don't find out until the job is closed and the numbers are final. Labor variance, overhead misallocation, and change orders that never got billed all compound quietly while the job is active, because nothing is comparing actual cost to the bid until it's too late to fix. Job profitability isn't about better estimating. It's about catching the gap between bid and actual while there's still time to act on it.
WHAT BREAKS WITHOUT THIS.
LABOR VARIANCE DISCOVERED AT CLOSEOUT
Crews are priced against an assumed production rate. Without weekly comparison of actual cost to that rate, variance compounds silently for the entire duration of the job and only becomes visible in the final closeout report, long after there was time to adjust.
OVERHEAD ALLOCATED BY GUESS, NOT BY ACTIVITY
Overhead gets spread across jobs using a rough percentage instead of being tied to actual equipment, admin, and support activity per job. Jobs that consume more overhead than their share look artificially profitable while others quietly subsidize them.
CHANGE ORDERS PERFORMED BUT NEVER BILLED
Field crews do the extra work because stopping to negotiate paperwork slows the job down. Without a documented change order process triggered in the moment, that work gets performed at no charge and margin disappears with no trace.
WHY CONTRACTORS MISREAD THIS.
Owners think: "We must have underbid the job."
What's actually true: The original bid is often accurate. The real issue is that nothing tracked actual cost against that bid while the job was running, so variance had no chance to be caught and corrected.
Owners think: "That GC made us do a lot of extra work for free."
What's actually true: Unbilled change order work is usually a process gap, not a GC problem. Without a same-week documentation trigger, extra work gets performed before anyone thinks to bill it.
Owners think: "Some jobs are just less profitable than others."
What's actually true: That's sometimes true, but it's frequently an overhead allocation artifact. A job absorbing more than its fair share of overhead will always look worse than one absorbing less, regardless of how well it was actually run.
THE DELIVERABLES.
WHO GETS HIT HARDEST.
Concrete & Masonry
Labor productivity varies significantly by pour type and wall complexity; without weekly tracking by cost code, variance in one area hides inside an overall acceptable-looking job.
Grading & Excavation
Cut/fill quantity variance and equipment cost allocation errors are classic job profitability failures that only show up when cost-to-complete is tracked weekly.
Framing & Drywall
MEP conflict rework and floor-by-floor billing misalignment quietly erode margin unless change orders are documented as they happen, not reconstructed at closeout.
FREQUENTLY ASKED.
