A job made money only if its revenue covered every cost it caused, and two of those are almost always missing. Labor costed at base wage understates the real figure by a quarter or more once employer taxes, insurance, benefits and non-productive hours are included. And overhead is rarely allocated at all, so a job at 18% gross margin in a business carrying 22% overhead reads as a win while actually losing money. Add burdened labor and allocated overhead and the ranking of your jobs usually changes — often reversing which customers you thought were the good ones. The pattern in the bottom quartile is the actionable part, not any individual job.
What this actually feels like
The job finished, the invoice was paid, and the P&L for the month looks reasonable. Then the year ends and there is nothing in the account, and nobody can point at which work was responsible.
Everyone has a theory. Usually it is "the Henderson job went long". Usually the truth is that most jobs were priced on a labor rate that was never real.
What it costs to do by hand
Establishing burdened rates is one to two hours a year. Costing a job at completion is fifteen to thirty minutes — if the coding was done as you went.
If it was not, you are reconstructing the job from receipts and memory, which takes hours and produces a number nobody quite believes. That reconstruction is where job costing usually dies.
Calculating true job margin
The burdened labor calculation, productive versus paid hours, overhead allocation, and how to find the pattern in the bottom quartile.
Read the guide →Input, skill, output
- QuickBooks — Revenue and cost of goods by product or job.
- PayPal — Payment fees netted against each sale.
- CSV upload — Or drop a cost file to analyze offline.
- Crunch unit economics — Margin for every product or service.
- Benchmark it — Against inflation and your sector.
- Model pricing — Three what-if price scenarios.
- Margin by line — Profit per product, service or job.
- Ranked list — Best and worst, with the gap quantified.
- Pricing scenarios — Three options modelled side by side.
Who this is for
- You quote work in advance and live with the estimate afterwards.
- You employ people whose time goes onto jobs.
- You suspect some work is not worth doing but cannot prove which.
If none of those describe you, this is probably not your first priority — and the rest of the library may point somewhere more useful.
Common questions
What is a burdened labor rate?
The true hourly cost — base wage plus employer taxes, workers comp, benefits and paid time off, divided by productive rather than paid hours. Usually somewhere between 1.25 and 1.5 times base, but calculate yours.
Why allocate overhead to jobs?
Because gross margin only tells you the job covered its direct costs. Net margin after overhead tells you whether it contributed to rent, insurance and your own pay.
My jobs all look profitable but the business is not. Why?
Almost always unburdened labor, unallocated overhead, or rework that was never coded back to the job that caused it.
Do I need job costing software?
Not to start. QuickBooks projects will do it. The real gap is usually time tracking — you cannot cost labor to a job nobody recorded hours against.
How often should I do this?
Every job at completion, with a pattern review quarterly. Annually is far too late to change how you quote.
See it on your own books, once
The First Close is one real month of your books, closed properly and configured to your chart of accounts, delivered inside two weeks. Full reconciliation against every processor, every exception flagged with the transaction behind it, and the narrative written. $497, refundable if the packet is not delivered, and it credits in full toward the first month if you continue.
Get Your First Close — $497 See a sample packet