Every job makes money. Why is the business still losing it?
The job reports and the bank balance tell different stories
You review completed projects and each appears to leave something over after labour and materials. Then the business accounts arrive and the overall result is disappointing. It is tempting to look for one bad invoice, but the difference may sit outside individual jobs.
Office costs, administration and other shared expenses still need to be met. A project contribution is not the same as the business's final profit. Start by making the connection between those two views visible, rather than adding a rough percentage to every quote and hoping it is enough.
Build one bridge between the reports
Choose a single reporting period. Bring together the job contributions recognised in that period and the shared expenses recorded for the same period. Ask your accountant or bookkeeper to help reconcile timing differences, incomplete jobs and any costs allocated differently between the reports.
Do not compare the full expected profit on unfinished contracts with a month's actual expenses. Equally, do not assume cash received in the month represents that month's earned revenue. Label forecasts and actual results clearly so that an apparent gap is not simply a mismatch between periods or accounting methods.
Count each expense in one place
Pick a shared expense and trace where it currently appears. Vehicle costs, for example, might already be included in a charge applied to each job. If the job report includes that allocation and you deduct the full expense again without reconciling it, your internal comparison can understate the result.
Make a short mapping list: direct job costs, allocated shared costs and expenses still held centrally. Use it with the person preparing the accounts. The aim is not to invent a new accounting policy. It is to understand the existing reports and prevent inconsistent internal decisions.
Use allocations carefully when quoting
For planning, shared costs may be spread using labour hours, project duration or another basis that reflects the business. No allocation automatically measures exactly what an individual job caused. Record why you chose the basis and check whether changes in workload make it unrealistic.
For instance, dividing annual overheads by an optimistic number of billable hours can make the allowance per hour appear reassuringly small. Test what happens if fewer hours are sold. Treat that as a planning scenario, not a forecast that the lower workload will occur. Keep the assumptions available for discussion.
Keep seasonal costs and annual bills visible when comparing months. An unusually low expense month is not necessarily a sensible basis for the overhead allowance used across a full year of future quotations.
Make a decision from the reconciled picture
Once the gap is explained, distinguish costs you can change soon from commitments that remain. Cutting an expense may also reduce capacity or create a different cost. Similarly, increasing prices on future work does not change the price of existing contracts unless there is a proper basis to do so.
Today, choose one month, obtain the job summary and business profit and loss report, and ask for the difference to be explained line by line. Mark unresolved items rather than forcing the totals to agree. If the whole business is under financial pressure despite apparently profitable jobs, contact CRP about turnaround support with both reports and the outstanding questions.