Which of Your Jobs Actually Made Money?

Plenty of trade businesses have a good year on paper and still cannot work out where the money went. The bank balance does not match how busy the crew has been, and nobody can say with any confidence which jobs were worth doing. This is almost always a job costing problem rather than a pricing problem. You cannot fix a rate you have never tested against reality.

Revenue is not the same as profit

A big job that runs two days over and needs a second material order can easily make less money than a small one that ran exactly to plan. Judged on invoice value alone, the big job looks like the better week. Judged on what it actually cost to deliver, it might have been the worst job of the month.

Until you compare what you quoted against what the job consumed, every decision about pricing, which work to chase and which customers to keep is being made on a feeling.

The three numbers you need per job

Job costing sounds like an accounting exercise, but in a trade business it comes down to three figures per job. What you invoiced, what you spent on materials, and how many labour hours actually went into it. That is enough to tell you what the job returned per hour, which is the number that matters.

You do not need software to start. A spreadsheet with a row per job and four columns will show you the pattern within a month. If your CRM or job management system already records time and purchase orders against a job, most of the work is done for you and it is a matter of actually reading the report.

Where the hours really go

The labour figure is where most trade businesses discover their real problem, because the hours that get forgotten are rarely the hours on the tools. Travel between sites, the trip to the supplier, the half hour on the phone with the customer the night before, the time spent writing the quote in the first place, the return visit to fix a small defect. None of it feels like work on the job, and all of it is.

Count it. If a job quoted at six hours actually consumed nine once travel and admin are included, that is not a rounding error, it is a third of the margin gone. The fix might be pricing, or it might be scheduling jobs closer together, but you cannot choose until you can see it.

Materials: quoted versus bought

Compare what you allowed for materials in the quote against what the supplier invoices actually came to for that job. Two things usually show up. Supplier prices have moved since you built your price list, and small extras bought on the day almost never make it onto the invoice to the customer.

Neither is dramatic on a single job. Across a year of jobs it adds up to a meaningful amount of money that was earned and then quietly given away.

Reviewing a month of jobs in twenty minutes

This works best as a monthly habit rather than something done once when things feel tight. At the end of the month, pull up every completed job and fill in the four columns. Then sort by return per hour and look at the top five and the bottom five.

The bottom five are the interesting ones. Look for what they have in common. It is often a particular type of work, a particular suburb that adds travel, a particular customer who changes their mind, or a job size that never quite justifies the setup time.

What to do with what you find

The point of job costing is not the spreadsheet, it is the decisions it lets you make. If a type of work consistently returns less per hour than everything else, you can raise the price for it, change how you quote it, or stop chasing it. If travel is eating a particular job type, you can group those jobs on the same day or add a zone-based travel allowance.

Sometimes the answer is to keep doing the low-margin work anyway, because it feeds referrals or fills quiet weeks. That is a legitimate choice. It is just a much better choice when it is made deliberately rather than by accident.

Start with the jobs you already finished

You do not need to wait for new work to begin. Take the last ten jobs you completed, find the invoices and supplier dockets, and make your best honest estimate of the hours. The estimate will be rough, and it will still tell you more than you know now. From there, recording the hours properly on new jobs is a small habit to add.

The short version

• Track invoiced value, material cost and actual hours for every completed job
• Count travel, supplier runs, quoting time and return visits as labour hours
• Compare quoted material allowances against real supplier invoices
• Review the month's jobs by return per hour, and study the worst five
• Use what you find to adjust pricing, scheduling or the work you take on
• Start with ten past jobs rather than waiting for a perfect system

Frequently Asked Questions

Do I need special software to do job costing?

No. A spreadsheet with one row per job showing invoice value, material cost and hours is enough to find the pattern. Job management or CRM software helps once the volume grows, mainly by capturing time and purchase orders against the job automatically instead of relying on memory.

Should I include my own hours if I am the owner working on the tools?

Yes. If you do not cost your own labour, every job looks more profitable than it is, and you end up effectively working for free on the jobs that run over. Put a realistic rate against your own time, even if you do not pay yourself that way.

How far back should I look when I start?

Ten to twenty recent completed jobs is usually enough to see a pattern without the exercise becoming a research project. Going back further is only worth it if your work has stayed similar, since old jobs priced under old supplier rates will not tell you much about today.