Looking for which jobs make money is a question with a plain answer, and the answer lives in your books. Steven Palmieri, a Tax CFO, sets the books up so each cost lands on the job that caused it. When that happens every month, the question stops being a hunch and becomes a page you can read.
Job costing means writing every cost against the job it belongs to. Labor hours go to the job the crew worked. Materials go to the job they were used on. Subcontractors, rented equipment and truck time follow the same rule. At the end of the month, each job has its own total, and you can set that total beside what the job billed.
The idea is old and simple. What makes it hard is that real work is messy. A load of shingles is bought for three roofs. A crew starts the morning on one site and ends it on another. The owner's own time never shows up at all. Job costing is the habit of sorting that mess before anyone reads a report.
Three things cause most of the trouble. The first is bulk buying, because material bought once for several jobs sits in one bucket until someone divides it. The second is crews who move, since time gets booked to the job the lead remembers and not the one the crew finished. The third is overhead that nobody spreads, such as the shop, the insurance and the supervisor, which makes every job look better than it was.
None of these is a sign of a careless owner. They are what happens when a business grows faster than its paperwork.
We start with the list of jobs and a rule for each kind of cost. Materials get a quick note at the time of purchase saying which job, or a split if several. Time follows the crew sheet. Overhead is spread by a rule we agree on once, such as a share of labor hours, and it stays the same until the business changes. Then we check the report against the bank every month, so the sorted numbers and the real money tell the same story.
A trustworthy job report is dull. It shows the same columns each month, in the same order, and you learn to read it quickly. The books can stay in QuickBooks Online, which tracks jobs, and we confirm what else a given business needs.
Say two roofs each billed $40,000. The first cost $29,000 and left $11,000. The second cost $38,000 and left $2,000, because the crew spent two extra days waiting on a delivery and a second dumpster was needed. These are made-up jobs with round numbers. Revenue looked identical, and the results were not close.
What would an owner decide from that page? Possibly to price delivery delays into roofs on that kind of building. Possibly to stop taking jobs at that margin from that customer. Possibly to look harder at how the second roof was scheduled. Each of those moves is a real choice, and none of them could be made without the page.
Once you can see profit by job, three decisions get easier. Price, because you can quote from what similar jobs really cost. Staffing, because you can see which crew composition produces the best results. And saying no, because a job that always loses money can be turned down or repriced with the facts in hand. Bidding the next job takes the first of these further, and work in progress and retainage explains how to read a job that is still open.
A job business tends to learn its real year when the return is finished, long after the bids were sent. A Tax CFO closes each month with costs on their jobs, so you see which work pays while you can still bid differently. The estimate follows the real year, and the return comes out of the same sorted books. If you want to know what we do all month, read about a fractional CFO in Fort Worth.
On a free Second Look call, we sort your own jobs by what they left. Paperwork and payment are not part of it.
You will be talking to the Steven Palmieri practice.