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Guide

How to know what a job actually made

A completed job and a paid invoice are not enough to establish profit. Build a review around the same scope and time period, then identify records that have not arrived yet.

Watch for

What to watch for.

  • Revenue includes work outside the cost comparison.
  • Late receipts make a finished job appear more profitable.
  • Cash received is confused with margin.

The routine

A practical routine.

  1. Define the scope you are reviewing

    List the original work and agreed additions. Separate cancelled or unapproved scope. Use the same scope for both the revenue and cost side of the review.

  2. Reconcile the cost record

    Collect material receipts, actual labour and outside-work bills. Avoid counting both an agreement and its bill as two costs. Note expected records that are still missing.

  3. Check revenue and collection separately

    Compare recorded revenue with costs using a consistent tax basis. Then review how much has been collected. A profitable job may still have an unpaid balance.

  4. Explain the difference

    Write down why the result differed from the estimate: extra preparation, a return visit, wasted materials or a scope change. Use the explanation when estimating similar work, without treating one job as a benchmark.

Worked example

A job profit example

Illustrative CAD figures, before sales tax. This is a worked example, not a customer result.

Recorded costs total $9,000, leaving $3,000 before overhead and income tax. Allowing for $500 of further agreed work reduces expected profit to $2,500. Do not add an approved subcontractor bill again as an outstanding agreement. Client payments and unpaid invoices affect the amount still to collect, not this calculation of job profit.

Agreed work price
$12,000
Recorded materials
$3,000
Recorded labour
$4,000
Approved subcontractor bills
$2,000
Profit on recorded costs
$3,000
Further agreed subcontractor work
$500
Expected job profit
$2,500

Using this guide

Common questions

Use this as an operational checklist with your bookkeeper’s accounting treatment. It is not a replacement for accounting advice or a promise that every cost is captured.

How do I calculate job profit?

Subtract the job’s material, labour and subcontractor costs from its work price on a consistent tax basis. Include further agreed work in the forecast without counting costs twice. Job profit is before overhead and income tax; missing records make the result provisional.

What should I do with missing costs?

Mark the review as provisional and list the missing records. Revisit it when they arrive instead of presenting a partial total as final profit.

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