How to Track Project Costs and Measure Job Profitability

The profitability blind spot

Ask most trade business owners which of their jobs are profitable, and they'll give you a gut feel. "The Smith job went well." "The Henderson renovation was a nightmare." But gut feel isn't data.

Without tracking actual costs against your quoted amounts, you don't know:

• Which job types are consistently profitable
• Which ones you're underquoting
• Where your time and money actually go
• Whether your hourly rate is high enough

What to track

Job profitability comes down to a simple equation:

Profit = Revenue (what you quoted) − Costs (what you spent)

The revenue side is easy — it's your quote total. The cost side is where most tradies fall short. Here are the four cost categories to track:

1. Labour costs

Every hour your team spends on a job has a cost. This isn't just their hourly wage — it includes superannuation, workers comp, leave entitlements, and the overhead of having them employed.

How to track it: Link timesheet entries to specific projects. At the end of the job, multiply actual hours by your loaded labour rate (wage + on-costs). Compare against the labour hours you quoted.

2. Material costs

Every receipt and purchase order for materials should be tagged to a project. Don't dump everything into a general "materials" bucket — attribute it to the specific job.

How to track it: Photograph receipts on site and attach them to the project. Record the supplier, amount, and date. Compare total material spend against your quoted materials.

3. Subcontractor costs

If you're using subbies, their invoices are a direct project cost. Make sure purchase orders are issued before work starts, and track actual spend against the PO amount.

How to track it: Issue purchase orders for every subcontractor engagement. When their invoice arrives, match it to the PO and the project.

4. Equipment and other costs

Hired equipment, skip bins, scaffolding, permits, and other project-specific expenses. These are often forgotten in profitability calculations, but they can be significant.

Budget vs actual

The most powerful view is a side-by-side comparison of what you quoted versus what you actually spent, broken down by category.

For example:

This job came in $1,395 under budget — a good result. But look at equipment: that category went over by $225. If this pattern repeats across jobs, you know your equipment estimates need adjusting.

What the data tells you over time

After tracking profitability across 20-30 jobs, patterns emerge:

Job types — Switchboard upgrades might consistently come in under budget, while kitchen rewires always blow out. Now you know to add a contingency buffer to kitchen rewire quotes.

Team members — Some team members consistently finish under quoted hours; others consistently go over. This might indicate training needs or unrealistic quoting.

Suppliers — If material costs are consistently higher than quoted, your price book might be out of date. Time to get updated pricing from your suppliers.

Seasonality — Some trades see margin compression in busy periods (more overtime, higher subbie rates) and better margins in quieter months.

Getting started

You don't need a complex system on day one. Start with:

1. Track time against projects (33 Trade's clock in/out does this automatically)
2. Photograph and tag receipts to projects
3. Issue purchase orders for subcontractors
4. Review the budget vs actual report when each job closes

33 Trade's profitability dashboard shows budget vs actual comparison for every project, with visual progress bars for each cost category. You can see at a glance which jobs are on track and which are heading over budget — before it's too late to act.