Are you making money on your jobs?

A busy job leaves little margin

A fencing contractor wins plenty of quotes and believes every job includes a margin. At month end, little remains after bills are paid. The owner has priced timber and site labour carefully but has not allowed for travel, quoting, equipment wear and return visits. A job review can show whether the pricing is sound or the apparent profit disappears in costs that were never counted.

Use actual figures from completed work

Choose comparable finished jobs and collect supplier invoices, timesheets, subcontractor bills and variations. Include the final amount invoiced and any credit given to resolve a complaint.

Compare actual hours and quantities with the estimate. Record why the difference arose rather than simply blaming the crew. Missing scope, access difficulties and inaccurate assumptions require different corrections. The review should improve the next estimate, not merely explain the last disappointment.

Include the cost of keeping the business running

Identify overheads such as administration, vehicles, insurance, software and workshop costs. Ask the accountant to help allocate them sensibly across the work. Include a realistic cost for the owner’s labour.

Do not treat unpaid owner time as free. A business that appears profitable only because the owner receives nothing may not have a sustainable price. Keep the calculation transparent so a margin is not counted before the costs it must support.

Check what happened to the extras

Review variations, customer requests and rework separately. Was extra work approved, priced and billed? Was a return visit a legitimate extra or correction of something the business should have delivered originally?

Keep the evidence behind each conclusion. Automatically billing every additional hour can create disputes; automatically absorbing every request can drain the job. Clear scope and an agreed change process help avoid both problems on future work.

Turn the review into a quoting decision

Identify which job types, customers and delivery conditions produce a dependable contribution. Adjust future estimates using the actual evidence, while checking market conditions and contractual obligations.

Business.gov.au’s quoting guidance recommends including costs and a margin rather than pricing solely to win. Test the revised approach on the next suitable quote and compare the completed result. A useful costing system changes decisions, not just the detail of a spreadsheet.

Source: business.gov.au — Prepare quotes

Calculate what the job really earns

Cost three completed jobs using actual labour, materials, extras and credits.

Add a sensible overhead and owner-labour allowance with your accountant.

Change the next quote where the evidence shows a missing cost or unreliable assumption.

Call CRP today about profit pressure and business recovery support.