You’re Booked and Busy—but Is Every Job Making You Money?

Business must be great - right?

Maybe.

Being busy means you have work. It does not automatically mean every job is profitable.

A contractor can finish ten projects, collect thousands of dollars, and still wonder:

“Where did all the money go?”

The money usually went somewhere reasonable. The problem is that the books may not show clearly which job used it.

Revenue is not the same as profit

Revenue is what the customer pays you. Profit is what remains after paying the costs required to complete the job.

Imagine a plumber charges a customer $2,500 for a project. That sounds like a successful job. But then subtract:

• $700 for materials
• $600 for employee labor
• $300 for a subcontractor
• $150 for fuel and transportation
• $100 for equipment rental
• $200 for other job-related expenses

The $2,500 job did not produce $2,500 of profit. It produced approximately $450 before considering general company overhead.

The invoice may look impressive. The profit is a little more humble.

Every job has its own financial story

A company-wide profit-and-loss statement tells you how the entire business performed. It does not always tell you which individual jobs made money.

• A bathroom-remodeling project may be highly profitable.
• A plumbing repair may take twice as long as estimated.
• A landscaping contract may generate steady revenue but require too much labor.
• A cleaning job may look profitable until travel time and supplies are included.

When all these transactions are combined, profitable jobs can hide unprofitable ones. You may know the company made money - but not which work produced it.

Track income and costs by job

Job costing means connecting the income and expenses to the specific job that created them. For each project, track:

• Customer income
• Materials and supplies
• Employee labor
• Subcontractor payments
• Equipment rental
• Permits
• Disposal fees
• Mileage, fuel, or transportation
• Other direct job costs

QuickBooks Online Projects can track income and costs for specific projects and help measure profitability. This feature is currently available in QuickBooks Online Plus and Advanced.

The important part is consistency. A project report cannot calculate the correct profit if half the expenses forgot which project they belonged to. Transactions can be surprisingly forgetful when nobody labels them.

Do not forget labor

For many service providers, labor is one of the largest job costs. If a project was estimated to require eight hours but actually required sixteen, the materials may not be the problem. The additional labor may be what reduced the profit.

• Employee hours
• Overtime
• Payroll-related costs
• Subcontractor labor
• Return visits
• Unplanned corrections or rework

A job may have strong revenue and still produce weak profit when the labor required is much higher than expected.

Include materials - even the small ones

Contractors usually remember expensive materials. The smaller purchases are easier to overlook:

• Screws and fasteners
• Cleaning products
• Replacement tools
• Protective equipment
• Disposal supplies
• Additional parts purchased during the job

One small receipt may not seem important. Fifty small receipts can become a full-time employee's lunch budget. Assign materials to the correct job and keep the supporting receipts organized.

What about general business expenses?

Not every expense belongs to one customer project. Some costs support the entire business, including:

• Business insurance
• Office software
• Advertising
• Bookkeeping
• Licenses
• General vehicle costs
• Administrative payroll
• Telephone and internet expenses

These are overhead costs. You do not need to randomly force every overhead expense into a customer job. However, your pricing must generate enough profit to help cover these expenses.

A job that covers only labor and materials may still fail to contribute enough toward operating the company.

Compare your estimate with the actual result

After completing a job, compare what you expected with what actually happened. Ask:

• Was the final revenue close to the estimate?
• Did materials cost more than expected?
• Did the job require additional labor?
• Were there return visits or corrections?
• Did the customer request work outside the original scope?
• Was the final profit worth the time and effort?

This information improves future estimates. If the same type of job repeatedly produces weak profit, you may need to adjust pricing, improve estimating, control costs, or reconsider whether that service is worth offering.

Review job profitability every month

• Completed jobs
• Jobs still in progress
• Income received by job
• Unbilled work
• Labor and subcontractor costs
• Materials and other direct expenses
• Estimated profit versus actual profit
• Transactions not assigned to a project

Do not wait until the bank account feels low. Your bank balance tells you how much cash is available today. Job-profitability reports help explain which work is actually building the business.

A full calendar should produce more than exhaustion

Contractors, plumbers, electricians, HVAC companies, cleaners, landscapers, and other property-service providers work hard enough. Their bookkeeping should help them identify which jobs reward that hard work.

FaithCore Advisory helps property-service providers organize their books, track income and costs by project, and understand which jobs are contributing to profit.

Because “We were busy all month” is good - but “We know which jobs made money” is much better.

Clear Books. Confident Decisions.

This article is for educational purposes and does not provide tax, legal, or investment advice. Consult the appropriate qualified professional for decisions specific to your situation.