5 Job Costing Mistakes That Kill Contractor Profits
(And How to Fix Them in QBO)
I won the bid. I lost the profit. That was me in 2023 with HERC Construction, LLC. A $500k public school renovation looked like a win—until the final numbers showed we barely broke even. The culprit? Sloppy job costing. If you're a contractor treating every expense like overhead or waiting until month-end to track costs, you're leaving money on the table. Here's how to stop the bleed—using tools you already have in QuickBooks Online.
Mistake #1: Treating All Costs as Overhead
Dump trucks, fuel, small tools—many contractors lump these into "general overhead" instead of assigning them to specific jobs. Result? You underbid the next project because you don't know the true cost of doing business.
Mistake #2: Ignoring Labor Burden
You pay $35/hr for a carpenter, but the real cost is $48/hr after payroll taxes, workers' comp, and benefits. Track only gross wages and you're eating 25% of your labor profit.
Mistake #3: No Change-Order Tracking
Client adds a patio? Great. But if you don't create a separate change order in your books, that extra revenue and cost vanish into the original job—distorting profitability forever.
Mistake #4: Spreadsheet Chaos
Excel is free, but version conflicts, broken formulas, and no audit trail cost you more than a QBO subscription ever will.
Mistake #5: Waiting Until Month-End
By the time you reconcile in week 5, the job is 80% done—and so are your profit leaks. Real-time data is the only way to course-correct mid-project.
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