Job costing for contractors: what will this job cost to finish?
A job can look profitable on Friday because the crew’s time is posted but the lumber invoice and the subcontractor’s second draw are still on someone’s desk. At the weekly job review ask two questions: what will it cost to finish, and how much cash leaves before the customer pays? The answers come from different schedules.
Keep the original estimate beside the latest field forecast
Use the same job and phase codes on the estimate, timecards, purchase orders and subcontract awards. Keep the bid’s labor hours, loaded labor rate, material quantities and subcontract allowances. If framing runs over, separate extra hours from a higher hourly rate. Ask the foreman how many units are installed and what remains; a percentage based only on dollars spent can hide rework.
Illustrative example: a margin that moves before the bill arrives
On a job with an approved contract value of $100,000, the bid allowed $75,000 of direct cost. The job now has $45,000 in posted costs, $18,000 in outstanding orders and subcontracts after billed amounts are removed, and $17,000 in remaining work not yet committed. Cost to complete is $35,000. Forecast final cost is $80,000, so expected gross margin is $20,000, or 20%, down from the bid’s 25%. That margin is before company overhead.
Have the project manager sign off on quantities and crew days remaining. Accounting checks that the open subcontract balance excludes invoices already posted and updates the job when late timecards arrive. Keep pending change orders on a separate line with their cost exposure and approval owner. Only approved changes increase the contract value used for the base margin.
Put the draw and the crew on calendars
For the next draw, record the billing cutoff, who signs the work, when the invoice can go out, any retainage and the likely receipt week. Lay weekly payroll, deposits and subcontractor payments alongside those dates. In a separate illustrative week, $9,000 of payroll and $6,000 of materials fall due before any collection: this job needs $15,000 that week, even if the margin looks fine. Put that gap into the 13-week cash forecast.
Before promising a recovery date, check crew capacity against other signed jobs. Name the person who will chase the change approval, move the next draw or revise the crew plan, and set a review date. For a walkthrough of how quoting and field work fit together, open BOOST and choose Construction. Bring one estimate, one job-cost report and the next billing date to your Apex conversation.