WHY JOBS LOOK PROFITABLE BUT LOSE MONEY.
A job can look profitable at 60% complete and still produce a loss at final billing, and it traces back to one of five causes: labor overruns not tracked at phase level, overbilling creating a false cash cushion, overhead not allocated to the job, change order costs absorbed into base scope, or retainage holdback skewing apparent margin. Not one of the five surfaces in a progress report that has no real job costing behind it.
Every one of the five is a measurement failure rather than a field failure. The crews did the work, the material got installed, and the billing went out, but the report you read while the job was underway didn't show the information that would have changed your decisions. That's why the surprise always comes at closeout, when the last pay app is smaller than expected and the retainage is still held by the GC. A monthly cost to complete report catches all five, because it forces the estimate and the actual spend into the same column.
WHAT IT MEANS.
A job that looks profitable but loses money is one whose progress reports read on budget while untracked phase labor, overbilling, unallocated overhead, miscoded change orders, or held retainage turn the final number negative.
The timing is what makes this expensive. A loss found in week eight of a twelve month job is a production problem you can still work on, and the same loss found at final billing is just a number you have to absorb. Progress reports built on billing percentage instead of cost percentage will tell you the job is fine right up until the month it can't.
WHERE THE MARGIN DISAPPEARS.
Labor tracked in one lump sum, so phase overruns stay invisible
When all labor gets coded to a single Labor line, the total looks on budget until the day it doesn't. A project 60% complete at 58% of labor budget reads fine, but if underground is 100% spent and above slab hasn't started, a serious overrun won't surface until next month's report. Phase level labor tracking puts that overrun in front of you in week two instead of week eight, while you can still change the outcome.
Overbilling creates a false cash cushion
A job billed at 65% complete that's really 52% complete has $78,000 in overbilling on a $600K contract. That cash looks like margin and it's borrowed revenue that has to be paid back before final billing. When the job closes, the last pay app is smaller than expected, retainage is held, and the profitable job produces a cash deficit. The WIP schedule catches this every month.
Overhead never gets allocated at the job level
A job cost report showing material, labor, equipment, and subs but no overhead will always look better than the job did. If overhead is 18% of revenue and a $400K job shows 24% gross margin before overhead, the real margin after allocation is 6%. Most contractors compare job level gross margin against net margin targets without working out that allocating overhead changes the comparison completely.
Change order costs get absorbed into base scope
Change order scope performed before approval, or coded to base scope and not to a change order cost code, inflates the base scope costs and makes the change order profit invisible or unrecoverable. You end up absorbing a base scope overrun that was never yours. Every change order scope item needs its own cost code from day one, before approval, not after it.
WHAT IT LOOKS LIKE IN DOLLARS.
On a $600K contract with 10% retainage, $60,000 is held until final acceptance. A job showing $54,000 in apparent profit at 90% billing has $60,000 in retainage outstanding, which means the cash collected is less than the cost incurred. The job is cash negative until the retainage releases, and the margin report never said a word about it.
ONE REPORT CATCHES ALL FIVE.
One report catches all five mechanisms, and it gets produced by the 12th of every month from closed books. It reports actual spend by cost code against estimate, calculates the cost to finish each phase at current production rates, and projects the final gross margin at completion. A job estimated at 22% gross margin that projects 18% needs attention that month, not at closeout.
Every phase gets its own labor cost code starting with the first timecard. Underground, above slab, and finish become separate lines, so a phase that's 100% spent at 40% complete is visible in week two. Phase level labor tracking is the single highest impact job costing change for most commercial subcontractors, because material invoices come in and tell on themselves while labor in one bucket can absorb an overrun for months.
Every change order scope item gets a dedicated cost code before approval. Retainage gets tracked as its own receivable line on the cost to complete for the same reason. What you can't see as a separate number, you can't manage and you usually can't collect, so both get their own row from the first day of the job.
THE OUTPUTS, NAMED.
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. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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 and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
