How to spot a job going over its quote while you can still fix it

Most jobs that lose money do not look bad on the day they go wrong. The crew is busy, the trucks are moving, and nobody is looking at the total. By the time the costs are added up and the invoice is written, the overrun is already in the books and all that is left is to explain it.

The fix is to watch the job while it runs. Compare what you have spent with what you quoted, and do it often enough that a bad trend shows up while there is still time to change the plan.

Spent against quote is not enough

A job that has spent 70 percent of its quote sounds fine until you know it is only 30 percent done. The better question is not "how much have we spent?" but "how much have we spent compared with how much of the work is finished?"

Those two numbers can drift apart for a long time. A crew that runs into a week of rock can burn money while progress stays flat. A job that spends little early and then hits its heavy weeks can look fine right up to the point it is over.

Three ways to measure how far along a job is

Not every job tracks progress the same way. In TrackOver, a job's burn uses the best progress information the job has, in this order:

• Quantities. If you budget quantities for each cost code, such as feet of trench or tons of base, and log what gets built, progress comes from the work itself. This is the most honest measure, because it counts what the crew put in place, not the hours they spent getting there.
• Hours. If there are no quantities, progress comes from hours worked against the hours budgeted for the job. This assumes the crew is working at the rate you bid, so treat it as a rough guide.
• Schedule. On a multi-day job with a first and last scheduled day, progress can come from how many company working days have passed. This is the weakest measure, because a job can be on the calendar and still be behind in the dirt.

If none of these is available, the job gets no forecast and the bar only warns about spending. That is deliberate. A forecast built on nothing is worse than no forecast.

What the warning levels mean

The burn bar on the job page shows what has been spent against the quote, split into labor, equipment, materials, subs and other costs. It starts to warn at 80 percent of the quote, the same line the office and the owner's morning glance use, so everyone looks at one number.

Past that, a job is marked as trending over when its cost at the current pace lands above the quote, and as over once spending passes the quote. The forecast only counts once enough of the job is done for the pace to mean something. Early in a job, a big number on a small amount of progress is noise, not a forecast.

Owners and managers get a push note once a day, at midday, when a job starts trending over and again when it passes its quote. A job that jumps straight past its quote gets only the "over" note, so you are not buried in repeats.

What to do when the bar turns

An alert is only useful if it leads to a decision. When a job starts trending over, do three things in the same week:

1. Find what is driving the cost. Labor, machine hours, materials, a sub, or a disposal bill. The burn bar splits spending by these, so you can see which one is pulling the job over.
2. Check for unbilled extra work. Often the overrun is real work nobody priced. If it is, write a change order now, while the work is fresh. Our change order guide covers how.
3. Tell the customer early if the scope has changed. A customer who hears about extra cost in week two accepts it more easily than one who finds it on the final invoice.

Make it a habit, not a year-end review

Year-end job reviews tell you which jobs lost money. Burn tracking tells you while there is still a chance to save one. They work together: the review shows the patterns, and the burn bar catches the next job before it becomes the next pattern.

If you are new to job costing, start with job costing for dirt contractors, which covers the three numbers each job needs. Then watch the burn on your next few jobs and check whether the progress measure matches what you see on the ground. The job budget burn page describes how TrackOver shows it.

Common questions

Do I need quantities on every job? No. Quantities give the best progress number, but hours and the schedule work when they are all you have. Just be clear with yourself about which one you are using, because the forecast is only as good as that measure.

Why does the warning start at 80 percent of the quote? It leaves time to act. A job at 80 percent of its quote with work still to do is the moment to check the plan, not the moment to find out it is over.

Is the burn bar a substitute for a bookkeeper? No. It reads the costs recorded on the job. If a bill or a receipt never got entered, the bar cannot see it, so keep costs current.