JOB COSTING VS REAL JOB PROFIT.
Job costing tracks what you spent. Real job profit is what you earned once overhead allocation, WIP accuracy, and billing timing are applied. Most subcontractors think they have both. They usually only have the first one, and the distance between the two is where the profit disappears.
There are two profit numbers on every job, and job costing only produces the input to one of them. Gross profit comes out of the cost report. Net profit takes one more step, because overhead has to be charged against the job before you know whether the work paid for the business that ran it. Most subcontractors stop at gross, call the job good, and then wonder why the bank balance doesn't agree with the P&L. The report was never wrong. It was answering a different question than the one being asked.
WHAT IT MEANS.
Real job profit is what you earned on a job after overhead allocation, WIP accuracy, and billing timing are applied to what job costing says you spent.
The published figures come from two places. CFMA's 2024 Construction Financial Benchmarker reports 21.8 percent gross profit margin, 11.8 percent SG&A and 6.3 percent net income before taxes across all respondents, with the best-in-class top quartile at 11.9 percent before taxes, and Jones Maresca and Company's 2025 Performance Benchmarks put specialty contractor gross margin at 15 to 25 percent with total indirect cost at 8 to 15 percent. Every one of those describes the market rather than a number we hold jobs to. The number to hold a job to is the one for your trade at your revenue, which sits on /construction-subcontractor-financial-benchmarks-by-trade, with SPM's own floor of 10 percent net profit before taxes underneath it. A job that clears the gross figure and misses the net one is telling you the overhead rate is the problem rather than the field. That is a pricing conversation.
WHERE THE PROFIT DISAPPEARS.
Overhead isn't in the job cost
Job costing tracks direct costs. Your office, your staff, your software, your insurance, and your owner salary get allocated at the company level and not at the job level. If you read a job costing report without applying your overhead rate, you're looking at gross margin and calling it net profit. The difference is your overhead rate multiplied by the job's revenue, and on most jobs that's a double digit number.
Billing timing creates false margin
A job that's 40 percent billed and 30 percent complete shows revenue without the costs to match it. The job costing report reads strong because revenue is ahead of cost. That margin isn't earned yet. When the costs catch up in the next billing cycle the number reverts, so reading job costing at a billing ahead point overstates the margin until the job normalizes.
Unbilled change orders add cost without revenue
A $40K change order gets approved and the crew starts. The cost codes to the job immediately and the billing event hasn't happened. Job costing shows the cost with no revenue against it. Every week that change order sits unbilled, the job's apparent margin drops. The billing hasn't caught up to the cost.
The wrong overhead rate in the estimate
You estimated this job at 11 percent overhead. Your true overhead rate is 16 percent, because you added two PMs and a project coordinator since the estimate was built. The job costing report knows what you spent on direct costs and it doesn't know your overhead rate moved. The distance between the estimated overhead rate and the true one is pure profit erosion on every job priced with the old number.
WHAT IT LOOKS LIKE IN DOLLARS.
Contract revenue of $1,000,000 less direct job costs of $780,000 gives gross profit of $220,000, or 22 percent. Now allocate overhead of $110,000. Net job profit is $110,000, or 11 percent. The job costing report stops at the first number, and the second one is the one that funds the business.
A $4.9M concrete sub was netting $161K on $4.9M of revenue, which is 3.3 percent. The job costing existed and nobody was applying an overhead rate to it. Once job costing was tied to real job profit with the overhead rate applied and the WIP cleaned up, net profit went to $1.1M.
THE FOUR THINGS THAT HAVE TO WORK.
Material, labor, equipment, subcontractors, and the rest each get their own code, and every dollar goes to the code it belongs to. When the categories get blended, the report still balances and it stops being usable for pricing the next job. Clean coding is the input that everything downstream depends on.
The rate gets built from what you're spending now and not from last year's tax return, and it gets applied to every job so gross profit turns into net profit on the same report. For scale, Jones Maresca and Company's 2025 Performance Benchmarks put total indirect cost at 8 to 15 percent of revenue across construction and CFMA reports SG&A at 11.8 percent across all respondents, and neither of those is a target we set for you. /construction-overhead-rates-by-trade carries the rate for your trade and band. When the verified rate comes back at 16 percent, every estimate built at 11 percent was underpriced by 5 points.
Billing ahead of the work creates margin that's not earned, and billing behind the work hides margin you already made. Either way the job report misleads you until the two line up. We reconcile the billing against percent complete every month, so the margin you read is the margin you have.
The schedule tells you what should be left. The crew tells you what's really left. A cost to complete built from the second one is what makes the job profit number reliable, and it's the piece most subcontractors skip because nobody owns it.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| 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.
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