PROJECT PROFITABILITY MONITORING
Know which projects are making money - while they're still running
Most builders find out a project lost money after it's finished, when nothing can be done about it. Proper WIP reporting and job costing show margin slipping while the project is live - when a variation claim, a re-price or a hard conversation can still save it.
What is WIP in construction accounting?
Work in Progress (WIP) measures the gap between what you've spent and claimed on a project versus what you've actually earned at that point of completion. Done properly, it tells you whether a job is genuinely ahead or just over-claimed - and it stops your P&L lying to you mid-year. Under-claimed WIP hides profit; over-claimed WIP fakes it.
What you get
Monthly WIP report
Real WIP by project, calculated from budget, percent-complete and claims to date. Not guesswork.
Job-level margin tracking
Gross margin per project, tracked monthly against estimate, so slippage shows up in weeks, not at final account.
Variation control
Variations captured, priced and claimed instead of absorbed. Unclaimed variations are the most common leak we find - often around 10% of contract value.
Profit fade analysis
Estimate-vs-actual on every completed job, so the same margin leak doesn't repeat on the next one.
Plain-English monthly pack
The numbers you need in 5 minutes, not a 50-page report.
Why job costing beats your P&L mid-project
Your P&L mixes every project, over- and under-claims included, into one number - so a business can look profitable while two of its five jobs quietly bleed. Industry studies put typical profit fade at 5-12 margin points between estimate and final account; on a $2M job that's $100k-$240k. Job-level tracking catches the fade at month two, not month twelve.
How it works
1. Set the baseline - budgets and claim schedules loaded per project; estimating assumptions documented.
2. Monthly discipline - percent-complete assessed, WIP calculated, margins compared to estimate. About 15 minutes of your time each month.
3. Act on it - every monthly review ends with actions: claim it, re-price it, or fix the process that leaked it.
FAQ
How do builders track project profitability?
By comparing each job's actual costs and earned revenue against its estimate every month, using percent-complete and WIP - not by waiting for the P&L. The tools matter less than the monthly discipline; we run it with you and challenge the numbers.
What's the difference between over-claiming and profit?
Over-claiming brings cash forward but doesn't create margin - the costs are still coming. WIP separates the two, so cash-flow comfort never gets mistaken for a job doing well.
Can you work with our existing job costing software?
Yes - we work with what your team already uses (Xero plus common construction add-ons) and fix the inputs and discipline around it, rather than forcing a system change.
Is this only for big builders?
No. The leaks are proportionally biggest for $2M-$20M builders, where one fading project can wipe out the year's profit and nobody's watching job-level numbers monthly.
Find your fading project before it finds you.
Book a free strategy session - bring your current job list and we'll show you what proper WIP would reveal.