How do I stop losing money on jobs?
The problem is almost always that you don’t know you’re losing money until the job is done. By then it’s too late to fix anything. You need to see costs as they happen, not months later when your accountant tells you a job went over budget.
Set up job costing that tracks every dollar to a specific project. Materials, labor, subcontractors, equipment rentals. Every expense gets coded to a job when it happens. Don’t dump costs into general categories and try to sort it out later. You can’t manage what you’re not measuring in real-time.
Compare your actual costs to your estimate while the job is still active. If you bid $45,000 on a kitchen remodel and you’re at $30,000 with framing barely done, that’s a problem you can still address. Maybe you push back on scope creep, tighten up labor efficiency, or have a conversation with the client about a change order. Waiting until final billing to discover the overrun gives you zero options.
Track labor hours by job, not just by day. Your crew’s time is probably your biggest variable cost and the one most likely to balloon without you noticing. If you’re not tracking hours against what you estimated, you’re guessing at profitability. And most contractors guess wrong in their own favor.
Stop doing extra work for free. Scope creep kills margins. The client asks for one more outlet, a slightly different tile pattern, moving a wall six inches. Each change seems small but they add up. Document every change, price it, and get approval before doing the work. The awkward conversation about a change order is better than eating the cost.
Review job costs weekly during active projects. A monthly review means you find problems after they’ve compounded. A weekly review lets you catch issues early enough to do something about them. Build a simple report that shows budget versus actual costs for each active job. Fifteen minutes a week prevents thousands in losses.
Know your actual costs from past jobs so future estimates are based on reality. If your trim carpentry consistently runs 20% over what you bid, you need to either bid higher or figure out why your labor is inefficient. Historical data makes you better at pricing. Guessing keeps you repeating the same mistakes.
Most contractors who complain about thin margins don’t have a pricing problem. They have a tracking problem. They don’t know which jobs made money and which lost it until it’s too late to learn from either. If setting up these systems feels overwhelming while you’re running jobs, working with a small business bookkeeper in American Fork who understands construction can get you the visibility you need without pulling you off the job site.
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More Questions
What accounting method should a contractor use?
Most contractors under $30 million in gross receipts use the cash method for tax simplicity and timing flexibility. But accurate job costing often requires tracking revenue and costs on an accrual basis internally.
Read answerWhere can I find a QuickBooks ProAdvisor in Utah?
Intuit's official Find-a-ProAdvisor directory is the starting point. You can filter by location to see certified professionals along the Wasatch Front. But certification alone won't tell you who's the right fit for your business.
Read answerWhat accounting does a lawn care company need?
Lawn care accounting needs to handle seasonal revenue swings, track profitability by service and customer, and keep equipment costs organized. The seasonal nature of the business makes cash flow planning especially critical.
Read answerWhat sales tax do contractors need to collect in Utah?
Most Utah contractors don't collect sales tax from customers on construction work. Instead, contractors pay sales tax when purchasing materials because Utah considers them the end consumer of materials incorporated into real property.
Read answerHow do I track jobs in QuickBooks Online?
QuickBooks Online uses the Projects feature to track jobs. Enable it in settings, create a project for each job, then tag every invoice and expense to the right project. The profitability report shows income minus costs for each job.
Read answerWhat bookkeeping does a small business need?
Every small business needs transaction recording, monthly bank reconciliation, proper expense categorization, and basic financial statements. Additional needs like job costing or payroll depend on your business type and size.
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