5 Job‑Costing Leaks Stealing 15–25% of Your Profit

The 5 Leaks

1. Ghost Labor Hour
   What it is: Techs are paid for 8 hours but bill only 5 (drive/shop/unbilled time hides cost).
   Why it matters: Lost billable hours are direct profit loss — $25/hr wage + burden = big leak.
   Quick fix: Start timing the field vs. drive/shop time (phone timer or a simple app). Count only billable time on jobs; allocate non‑billable time separately.

2. Material Markups Forgotten
   What it is: Materials are sold at near-cost, or the markup is inconsistent.
   Why it matters: Small markup slippage kills margins across jobs.
   Quick fix: Standardize a minimum material markup (30–50%) in QuickBooks job templates and apply automatically.

3. Overhead Buried
   What it is: Vehicle, insurance, tools, and software costs aren’t allocated per job.
   Why it matters: Jobs look profitable on paper, but don’t cover hidden overhead.
   Quick fix: Calculate overhead rate = Annual overhead ÷ billable hours. Add that rate to job pricing.

4. Complexity Underbid
   What it is: Jobs take longer than estimated because of on‑site surprises.
   Why it matters: Extra hours at wage rates vs. a flat estimate equals lost margin.
   Quick fix: Add a 15–25% contingency buffer to time and materials on estimates for jobs with common variability.

5. Untracked Subs (1099s)
   What it is: Subcontractor costs not tracked per job, or misallocated.
   Why it matters: You can’t see true profit on jobs that use subs — bad decisions follow.
   Quick fix: Set up sub costs per job in QuickBooks and require POs or job notes for any 1099 labor.

Quick Math
A $5,000 job — fix leaks = $500–$1,200 recovered; this often covers your monthly package fee.

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