Job Costing vs. Guesswork: Why Your Margins Are Suffering
Guessing your costs? You’re not alone.
Many trades and construction business owners rely on gut feel or rough averages when quoting jobs. It’s a common practice, especially when things are busy and you’ve got more work than hours in the day. But while you're rushing from site to site, those guesses might be quietly eating away at your margins.
If you’re serious about scaling and want to stop wondering why the numbers aren't adding up, job costing is the game-changer.
What is Job Costing (And Why Does It Matter)?
Job costing is the process of tracking all the direct and indirect costs that go into each individual project or job labour, materials, subcontractors, equipment hire, and overheads. This data gives you the real picture of what a job actually costs you to complete.
Guesswork? It’s the opposite. It’s basing your quotes on what similar jobs have cost in the past or what “feels” right, without the actual data to back it up.
When you’re operating on guesses, you’re risking:
Underquoting jobs
Losing money without realising it
Inability to pinpoint where profit is leaking
Working hard without seeing it reflected in your bottom line
The Cost of Not Knowing
Let’s say you win a $100,000 job. Great, right? But if you didn’t account properly for subcontractor delays, material price increases, or overtime on-site, you could walk away with little to no profit or worse, at a loss.
And the worst part? You won’t even realise it until months later when you’re wondering where the cash is going.
What Accurate Job Costing Does for You
Gives you clarity: Know exactly what every job is bringing in and costing you.
Improves quoting: Confidently quote future jobs based on real numbers, not assumptions.
Boosts profitability: Spot inefficiencies and reduce cost blowouts.
Improves cash flow: Forecast how much you’ll need and when you’ll need it.
Makes decisions easier: Whether it’s hiring, buying equipment, or scaling up, you’re making choices backed by data.
How to Start
You don’t need to overhaul your entire system overnight. Start by:
Tracking time and labour accurately (yes, every hour matters)
Recording materials and supplier costs per job
Allocating overheads like admin or vehicle use fairly
Reviewing completed jobs to compare estimates vs actuals
If you’re not sure where to begin, or if this all sounds too hard - it doesn’t have to be. We work with trade and construction businesses every day to implement job costing systems that fit your workflow.
Guesswork might feel faster, but it’s costing you. Job costing puts you in control. It gives you the insight to price smarter, scale confidently, and actually take home what you’re working for.
Need help getting your job costing systems sorted?
Book a free strategy call and let’s map out how to increase your margins, without the guesswork.