A Construction Bookkeeper's Guide to Smarter Production for Small Contractors
Why "Doing the Work" Isn't Enough
Many contractors assume that once the job starts, the hard part is over. But production is where the majority of the risk lives:
From a bookkeeper's point of view, this is when the numbers begin to go awry.
Profitability doesn't just come from winning jobs—it comes from controlling how they're delivered.
What "Delivering Profitably" Actually Means
To deliver projects profitably, you need to finish the job:
It's not just about good craftsmanship. It's about project management. Whether you're a solo operator or have a small team, production needs structure. Fortunately, it doesn't need to be complicated.
Where Small Contractors Lose Profit During Production
Before we dive into solutions, let's look at where money is most often lost on the job site:
1. Untracked Labor
If you don't know how many hours you or your crew are spending on a job, you can't compare it to your estimate. It's one of the most common profit-killers we see in the books.
2. Material Overruns
Materials get lost, over-ordered, or wasted—especially if you're not reconciling purchases to job estimates.
3. Unbilled Change Orders
Clients often add or alter project elements. If those changes aren't documented and billed, you're giving away free work.
4. Delays and Downtime
Time is money. Waiting on materials, subs, or client decisions can derail your schedule and cost you future jobs.
5. Scope Creep
"Can you just add this one little thing?" becomes a margin-eating monster when not adequately managed.
Now, let's talk about how to prevent those losses and protect your bottom line.
7 Ways to Deliver Projects More Profitably
1. Start with a Clear Scope and Signed Agreement
It may sound simple, but many contractors begin work without a detailed, signed agreement. You need:
This sets expectations and gives you leverage when things change (and they will).
2. Create a Simple Project Timeline
Even a basic calendar or whiteboard showing:
Suppose you're using software like Buildertrend or Jobber, great. If not, even a shared Google Sheet can work. The goal is visibility.
3. Track Labor in Real Time
You can't manage what you don't measure. Use time tracking tools (like ClockShark or QuickBooks Time), or even a shared text log, to record:
This allows you (and your bookkeeper) to identify when jobs are dragging and compare actual versus estimated hours.
4. Monitor Materials Closely
Set up a simple system to:
If you have frequent material overruns, your bookkeeper can help you adjust future estimates and avoid surprises.
5. Enforce a Change Order Policy
This one is HUGE.
Every time a client asks for something outside the original scope, pause and issue a change order. Even a one-page form signed via email or a mobile app is sufficient.
Change orders should:When this is routine, you stop giving away "just one more thing" for free.
6. Communicate Early and Often
Most client disputes happen when they're left in the dark. Set the standard for regular updates:
This maintains high trust and prevents minor issues from escalating into unpaid invoices or negative reviews.
7. Review Project Profitability After Completion
After every project, sit down with your bookkeeper (or even just your notes) and ask:
This post-job review turns every project into a learning tool that improves your future estimates, planning, and pricing.
Where Bookkeeping Supports Better Production
As your construction bookkeeping specialists, we can help you:
In short, good production data = good financial reporting. And when we work together, we can spot patterns that help you grow smarter.
The Results of Controlled Production
When you focus on project delivery as intentionally as marketing and money management, you'll start to see:
Over time, this builds a reputation that attracts higher-quality clients, enabling you to raise your rates with confidence.
Final Thoughts
Build Systems, Not Just Projects
You know how to build a deck, remodel a kitchen, or manage a crew. But your business needs structure, too. When you build systems around how you deliver your work, you reduce chaos and protect your profits.
Pillar 3: Production isn't about doing more—it's about doing smarter. With a bit of planning, tracking, and review, you can make every job a stepping stone to a stronger, more profitable business.
Want Help Tracking Job Profitability?
If you're tired of guessing how much money you're really making on each job, we can help you set up:
Let's get your numbers working for you.
Book a free consultation today and let's build better systems together—so you can build a better business.
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