Accepted budget
The revenue and planned cost baseline agreed when the quote was accepted. Keep this traceable rather than overwriting it as the job changes.
CONSTRUCTION JOB COSTING
Construction Job Costing: Compare Budget, Actual Costs and Forecast Profit
An accepted quote is your starting point. The job's real result depends on costs incurred, approved changes and what remains to finish. Keep those figures together so you can see the expected outcome before the job closes.
Three numbers to keep separate
Actual cost to date
Costs incurred for the job, including unpaid supplier invoices and recorded labour. Payments made are not the same as costs incurred.
Forecast final cost
Actual costs plus the costs still expected to finish. A job with low spending today may still have a large amount of work ahead.
What should a construction job-costing spreadsheet track?
Start with a unique job reference and accepted contract value. Keep materials, labour, subcontractors, equipment and other direct costs separate enough to compare the same categories used in the estimate.
Record approved change orders separately from pending work. Track invoices and cash received alongside costs, then review the remaining work and your chosen company overhead allocation. A portfolio view helps you see several jobs; a job review helps you explain the variance on one.
How to calculate job profit
- Revised revenue = original contract value + approved changes.
- Direct job cost = materials + labour + subcontractors + equipment + other direct costs.
- Gross profit = revised revenue − direct job cost.
- Contribution after overhead = gross profit − allocated company overhead.
- Margin = the selected profit measure ÷ revised revenue.
For a job in progress, use forecast final costs, including the expected remaining work. Label the result as forecast; it is not a completed actual result.
A worked example
A fictional contractor has a $40,000 contract and $1,500 of approved changes. Direct costs total $30,000. Revised revenue is $41,500, gross profit is $11,500 and gross margin is 27.71%.
After a $3,000 company overhead allocation, contribution is $8,500 and margin after overhead is 20.48%. Markup on the $33,000 total cost is 25.76%. The free calculator's Load example button uses these figures.
These figures explain the arithmetic. They are not suggested prices, rates or target margins.
Why compare estimated and actual costs?
A total variance tells you something changed. Separate cost categories and labour hours help you investigate whether the cause was quantity, unit price, productivity, scope, subcontract coverage or missing recovery.
Keep the accepted baseline, review the final figures and record an explanation before changing future estimating assumptions. A single unusual job is a reason to investigate, not automatically a new standard rate.
Profit and cash are different
Profit compares revenue with costs. Cash received is the money the customer has paid. A profitable job can still have outstanding invoices, and a large payment received early does not mean the remaining work is funded profitably.
Choose the tool that fits your next step
FREE · ONE JOB
Job Profit Calculator
Enter revenue and costs to check gross profit, contribution after overhead, margin, markup and estimate-versus-actual variance. No account, uploads or saved job register.
Use the free calculatorUS$19.99 · COMPLETE PACKAGE
Toolkit PRO v3.2
Build estimates and quotes in one workbook. Register accepted jobs and track costs, remaining work and forecast profit in a separate business master. Includes two demos, five bonuses, forms and guides.
See everything includedJob-costing questions
Can I use a job-costing workbook before a job finishes?
Yes. Enter incurred costs and a current estimate of the remaining costs. Review approved revenue changes and company recovery before relying on the forecast.
Should unapproved changes count as revenue?
Keep pending changes separate. The free calculator's revenue input is for approved changes, so hoped-for billing does not silently improve the result.
Is this accounting software?
No. Job-costing tools support project reviews and estimating feedback. They do not replace bookkeeping, bank reconciliation, payroll or tax reporting.
Does margin equal markup?
No. Margin divides profit by revenue; markup divides profit by cost. Read the free markup and margin calculator for a focused percentage check.