Why Your Job Costing Is Off (And How to Fix It)

Most small contractors lose margin on jobs they thought were profitable. The problem usually isn't pricing — it's how you're tracking costs in the field.

The three most common job costing failures

1. Labor hours are estimated, not tracked

You bid a job at 120 hours. Your crew finishes in 140. If no one records the overage, it disappears into overhead and you wonder why the month was thin. The fix is simple: a daily sign-in sheet (or time-tracking app) tied to job numbers. Every hour gets assigned.

2. Materials are reconciled at month-end, not per job

Lumping all material purchases into one account means you can't see which jobs consumed more than estimated. Split your materials account by job number in your accounting software. If that feels like too much overhead, at minimum track big-ticket items — lumber, steel, concrete — per job at the point of purchase.

3. Subcontractor invoices aren't matched to jobs at intake

When a sub invoice arrives, it often gets coded to "subcontractors" as a lump. Code it to the job immediately. Your accounts payable person or bookkeeper should be doing this — if they aren't, set the rule today.

What good job costing looks like

A job costing report should show you, for every active job:

• Budget vs. actual for labor, materials, and subs
• Percentage complete vs. percentage of budget consumed
• Projected final cost at current run rate

If you can pull that report every Friday, you'll catch overage while you still have time to act — before the job closes and the damage is done.

The tool that changes this

We built a Job Costing Tracker template specifically for $500K–$15M contractors who aren't ready for a full project management platform. It's a structured spreadsheet that enforces the three disciplines above and auto-calculates your projected margin as you enter actuals.

It's available to all Footing members in Module 2: Financial Controls.