Task

Finding out which jobs made money, a month after they finished

By the time the answer arrives, more of the same mistake has been made.

Knowing which jobs made money a month later is knowing it too late to change the next quote.

Not every business has this problem, and some should leave it alone.

Most of these can be done better. Whether it's worth doing is a separate question. What follows is one common form of the problem, described in general terms, because your version will differ. These are possible challenges, not a description of your business, and some should be left exactly as they are. If it sounds like your week, that's worth a conversation.

Watch: The Cost of Doing It on Friday

Watch: Money That Isn't Where the Total Says It Is

Watch: Quietly Losing Money on Jobs You Won

Sound familiar?

You find out whether a job made money at month end.
Timesheets say eight hours on Tuesday, not which job.
Supplier bills arrive weeks after the material was used.
Nobody compares the finished job with the estimate.

What it looks like

A job gets quoted, done, and invoiced. Whether it made the money it was supposed to make is answered later, at month end or quarter end. Answering it means gathering things from different places: labor hours from timesheets, materials from supplier invoices (some not yet arrived), subcontractor charges, equipment time, and whatever was added on the job that nobody quoted. It is genuinely difficult work and it produces a real answer. The answer just arrives after it can be used.

What it costs

Nearly everything else in this guide costs money once. This one compounds. A job finishes in early March. In late April somebody works out that it lost money because labor ran to twice the estimate. In between, the business quoted four more jobs of the same type on the same estimate, because nothing suggested it was wrong. That is an illustration, not a finding. The pricing model is what gets corrupted, and the aggregate hides it: overall margin looks acceptable because profitable work subsidizes the losing work, and the losing category keeps being sold, often enthusiastically, because work priced too low always wins easily.

Where it goes wrong

Supplier invoices arrive weeks after use. The answer waits for the slowest supplier.
Hours are recorded against a day, not a job. Splitting them is done from memory, afterward.
Extras are done and not captured. The extra hour and the part fetched from the van are real cost, never quoted and often never recorded.
The comparison is against the invoice, not the estimate. The estimate is the number that needs fixing.

What a better version looks like

Cost accumulates against the job as it happens: hours when worked, materials when issued, committed cost when the order is placed. The useful output is an exception, such as a job that has passed its estimated labor while it is still running, which is early enough to act. And estimate against actual feeds back into how the next one is priced. A rough number during the job is worth more than an exact one six weeks after.

What still needs a person

A person decides what an overrun means. A job over on labor might be a bad estimate, a difficult site, a training crew, or a customer who kept changing their mind. Those look identical on paper, and telling them apart takes knowing the work.

Questions worth asking about your own operation

How long after a job finishes do you know whether it made money?
Can you see cost against a job while it is still running?
Does anyone compare the estimate with what happened?
Which job type do you win most easily?

If this sounds familiar

Bring me the version you actually have. I'll learn how the process really works before I suggest anything. If it isn't worth changing, or isn't a fit for me, I'll say so. Talk through a problem