Most job losses are invisible at bid time. They don't show up as one big mistake — they show up as actual labor hours running past what was estimated, material costs drifting from what was priced, and change orders that got done first and priced later, if they got priced at all.
Where Job Losses Actually Hide
- Labor hours vs. estimate — the crew took longer than the bid assumed. Sometimes it's a productivity problem, sometimes the original estimate was optimistic.
- Material cost drift — you priced the job off last quarter's numbers, and the distributor's price sheet moved before the material got ordered.
- Unpriced change orders — extra work got done in the field to keep the job moving, and the paperwork to bill for it never caught up.
You Can't See It Without Job Costing
The only way to catch any of this while the job is still open — not six months later, at tax time — is job costing: capturing actual labor, materials, equipment, and subcontractor costs against the job in the same categories you used to estimate it. If you haven't set that up yet, that's the first move, not this article.
Illustrative example
Not a real client — shown to demonstrate the math
A $50,000 bid built on 200 estimated labor hours that actually takes 260 hours doesn't just cost you 60 extra hours of wages — at a fully burdened labor rate, that's often the entire profit margin on the job, gone, before a single change order or material overage is even counted.
What To Do About It
Pull the job cost report while the job is still open, not after it closes. Compare actual-to-estimate by category — labor, material, equipment, subs — so you know which one moved and by how much. That tells you whether the fix is a pricing problem, a productivity problem, or a change-order-tracking problem, and those three things get fixed very differently.
A job that loses money isn't a mystery after the fact — it's a pattern that was visible the whole time, if anyone was looking at actual-versus-estimate while the job was still open.
Frequently Asked Questions
How do I know if it was a labor problem or a pricing problem?
Compare actual labor hours to estimated hours for that job. If hours were close to plan but you still lost money, look at material and change-order pricing instead.
Can I catch this before the job is finished?
Yes — that's the entire point of job costing. Reviewing actual-versus-estimate mid-job, not after closeout, is what lets you correct course on the next job or even the current one.
What's the single biggest cause of job losses?
Unpriced or under-priced change orders are the most common invisible leak — the field keeps the job moving, and the billing paperwork never catches up.