JOB LOOKED FINE. NOW IT'S NOT. WHAT HAPPENED.
Early in a job, cost visibility is limited. The phases that have started look fine, and the phases that haven't started yet carry zero actual cost, which makes every job look better than it will at 60% complete. Something happened between this looks good and we're underwater. Every job that turns has a specific cause, and the cause determines the fix.
There are four causes and one of them is yours. Labor ran over on a phase, material cost moved after the bid, change order work got built and never billed, or early overbilling is correcting now that production has caught up to it. Two of those are cost problems and two are timing problems, and they call for opposite responses. The bad news is that a job total tells you nothing about which one you have. The good news is that a phase-level cost report and a WIP schedule together tell you inside 20 minutes.
WHAT IT MEANS.
An apparent mid-job loss is either a true cost overrun on one specific phase or a billing timing problem, and only a phase-level job cost report read against the WIP schedule tells you which one you have.
The fix is only available while the job is still running. A cause identified at closeout is a lesson you paid full price for. The same cause identified at 40% complete is a decision about crew size, a purchase order, or an invoice that goes out this week.
FIND THE SOURCE BEFORE CLOSEOUT.
Labor hours exceeded the estimate
This is the most common cause. The crew is running 15% to 25% over estimated hours on one specific phase. Early in the job the over-hour rate is small and the total variance looks manageable, but by 50% to 60% complete the overrun has compounded to where it's consuming margin that was bid on other phases. A phase-level labor report shows it while there's still time to adjust crew size or production approach.
Material cost escalation
The job was bid when material costs were lower. By the time the purchase orders went out, prices had moved: fuel surcharges on delivery, commodity increases on steel or copper, and supply chain delays that forced sourcing from secondary vendors at higher prices. Every dollar of material cost above bid comes straight out of gross margin with nothing to offset it.
Change order work completed and not billed
This is the one that masquerades as a loss when it's not one. T&M and change order work gets completed in the field and verbally approved, the cost hits the job, and the formal billing waits. The job cost report then shows a large apparent overrun that's really $40K to $80K of unbilled change order work sitting as cost with no revenue against it. Pull the change order log and compare it to what has been formally invoiced.
Early overbilling correcting
Early in the job, billing ran ahead of percent complete, which is standard practice to front-load cash flow. Now the project is catching up to that billing and the apparent margin is correcting downward. The cost side never moved, the overbilling is unwinding as earned revenue catches up, and the job may still be on margin. The WIP schedule tells the difference.
WHAT IT LOOKS LIKE IN DOLLARS.
A job that looks unprofitable often has $30,000 to $80,000 of change order work completed and verbally approved but never formally billed. The cost is real and the revenue simply hasn't been asked for yet. Pulling the change order log against formal billing almost always surfaces it.
A labor phase running 25% over at 40% complete is a decision you can still make this week. A job total sitting 8% over is a number you can only worry about. That difference is the whole argument for coding cost by phase instead of carrying one number for the job.
TWO REPORTS. BOTH NEEDED.
Pull actual against estimated cost for every phase or cost code on the job, not a job total. Sort by variance percentage with the largest negative variance at the top, because the phase with the biggest overrun relative to its own estimate is where the margin went. A labor phase running 25% over at 40% complete tells you what to address, while a job total sitting 8% over tells you nothing you can act on.
Calculate percent complete as cost to date divided by estimated total cost, then earned revenue as contract value times percent complete, then billed to date. If billed to date is well above earned revenue, the job is overbilled and the early billing is correcting itself. If billed to date is well below earned revenue, there's underbilling that needs to go out immediately. The WIP tells you whether the apparent loss is a cost problem or a billing problem, and those take different fixes.
The diagnosis takes two reports that most contractors in the $1M to $12M range either don't have or don't run monthly. Once both exist, the cause is almost always obvious inside 20 minutes of review. SPM runs the job cost and WIP review every month for every client, so the answer comes before closeout instead of after 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.
Pricing
| 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.
