What expenses should contractors track on each job?
Every dollar spent on a job affects whether you made money or lost it. Without tracking expenses by project, you’re guessing at profitability instead of knowing it. Here’s what belongs on each job.
Materials are the obvious one. Lumber, concrete, drywall, fixtures, finishes, fasteners, and specialty items all get coded to the specific project when purchased. Don’t lump everything into a general materials expense. Assign it to the job where it was used.
Labor hours for your crew need to be tracked daily and assigned to the correct project. If employees work multiple jobs in a week, their time should be broken down by job. This is the only way to know your true labor costs per project and whether your estimates are accurate.
Subcontractor payments are often the largest job expense and the easiest to track. Every dollar paid to subs gets assigned to the project they worked on. You’re already cutting checks or making transfers, so coding them correctly just takes an extra step.
Equipment costs include rental equipment charged to specific jobs. For equipment you own, track fuel usage by job if possible. Many contractors skip equipment costs entirely and end up underestimating what jobs actually cost them.
Permits and fees like building permits, plan review fees, and inspection costs are job-specific. These get forgotten when analyzing profitability later because they happened early in the project.
Delivery charges for getting materials to the site belong to the job, not general overhead. If you’re paying the lumber yard for delivery or having concrete trucked in, assign those costs to the project.
Waste disposal varies significantly by job type and size. Dumpster rental, dump fees, and debris removal should be tracked per project. This helps with accurate estimating on future similar jobs.
Job site supplies like tarps, tape, protective coverings, and consumables seem small individually but add up over a project. Track them or accept that your job costing will always be slightly off.
Temporary facilities including portable toilets and temporary power rentals belong to the jobs where they’re used. Same with job site trailers if you’re renting those.
The mistake most construction contractors make is only tracking the big purchases. You remember the $8,000 lumber order but forget the $200 in supplies, the $150 in dump fees, and the $300 in delivery charges. Those add up to real money that affects whether a job was actually profitable.
Change orders deserve separate tracking when possible. Additional materials and labor from scope changes should be visible so you can see whether change orders are profitable or just breaking even.
If tracking all this feels overwhelming while you’re running jobs, that’s normal. Working with a bookkeeper near Gentry who understands construction can help you set up systems that make job-level tracking manageable without eating into your workday.
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