Stage 1 · Lesson 3 of 12 · 10-minute read
Job costing: the discipline of finding out what really happened
You wrote a defensible bid. The job is done. Two months later, do you know what it paid you?
Most contractors don't. Not really. They know the check cleared. They know there was money in the account in April. Ask them what the job earned and they'll say "it went fine." That's not a number. That's a feeling with a balance attached.
Job costing is the autopsy. You compare what you promised yourself against what actually happened, line by line, one job at a time. Not to punish anyone. Because the variance is the teacher.
Three numbers, one job:
The variance always has a cause with a name attached. Tile ran long. The sub found rot behind the wall. The change order you never wrote up. Materials bought twice because the first delivery went to the wrong site. Every variance points at a process, and every process can be fixed. But only if you look.
Enter the job line by line. Nothing here touches your saved numbers.
A demo number. Save your bid price in Lesson 2 and it starts here.
A demo number. Save your invoice share in Lesson 2 and it starts here.
Enter a line and watch the margin move.
The autopsy works when it happens on every completed job, within a week of the final bill, while the memory is honest. Small job, big job, your best customer's job. Especially that one. Favoritism in job costing is how favorite customers quietly become unprofitable ones.
MIKE'S EXAMPLE
Mike · General contractor, 43
Mike ran the autopsy on the bathroom addition from Lesson 2. Bid: $43,300. Planned: $36,800 of cost, 15% margin.
The bid was fine. The job leaked $1,700 through two small causes. Before the autopsy, that job would have gone in the books as "went fine." Now it goes in the books as: waterproofing scope written too thin, sub running long. Two fixable causes. One is a spec sentence. The other is a conversation.
Take the last job you finished. You need three things: the bid, the invoice, and forty minutes. Enter materials, labor, subs, extras, and what the job carried of your standing invoice. Then write one sentence per variance: the cause, not the excuse. "Tile ran long" is a cause. "Bad luck" is an excuse.
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The actual margin on your last completed job. Enter it, even if it stings. Lesson 4 shows why a healthy margin can still leave you cash-starved.
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Build the autopsy into your routine at the Meridian Shift tools hub. Job costing starts with your numbers, not your accountant's quarterly summary.
Lesson 4: you earned 11% and you can't make payroll. Both facts are true at the same time. The gap between them is measured in days, and it's called cash flow.