Track what you actually pay for materials on each job, not what you estimated or what materials cost last month. Lumber prices can swing 20% in a few weeks. Steel, concrete, and specialty materials fluctuate with supply and demand. If you’re using old prices or rough averages, you don’t actually know which jobs made money.

When you buy materials, record the purchase in QuickBooks and assign it to the specific job where those materials will be used. Don’t lump everything into a general materials expense category. That approach tells you total material spending but nothing about individual job profitability. You need to see that the Smith renovation used $4,200 in materials while the Johnson project used $6,800.

Save invoices and receipts that show the prices you paid. This documentation matters when you’re reviewing job costs later and wondering why materials ran higher than expected. It also helps when pricing similar work in the future. If you bid a kitchen remodel based on cabinet prices from six months ago, you might be underwater before you start.

Run job profitability reports after completing projects. Compare what you estimated for materials against what you actually spent. If you’re consistently under-bidding material costs, your estimates need adjusting. If certain suppliers or material types are causing overruns, you can address that specifically.

For longer projects spanning several months, consider including a price escalation clause in your contracts. This protects you when material costs rise significantly between signing and purchasing. Many construction contractors learned this lesson during recent supply chain disruptions when lumber prices doubled mid-project.

Update your estimate templates when material prices shift significantly. The numbers you used last year might be 15% low today. Winning jobs with outdated pricing just means losing money faster.

Some contractors buy materials in bulk when prices are low to lock in costs for upcoming work. This can save money but ties up cash and requires storage space. Track inventory carefully if you go this route so you know actual costs when materials get used on specific jobs.

The goal is connecting real costs to real projects. When you know exactly what each job cost in materials, labor, and overhead, you can see which types of work are actually profitable. That data lets you price smarter, avoid money-losing jobs, and focus on work that makes financial sense.

A bookkeeper in Northwest Arkansas who understands job costing can set up your QuickBooks to track materials properly by project. The setup takes some effort upfront but pays off every time you need to know whether a job made money or lost it.