A steady divisional margin can hide jobs that slide; a weekly forecast on every live job shows the contribution at stake while there is time to act.
Renzo Demartini, Chartered Accountant and finance executive · · 4 min read Drafted with AI, reviewed and spot-checked by me.
Exhibit 1Is job J-3104 still earning the 30% it was priced at?
Job J-3104
Office fit-out, sample, excl. GST
Contract value
A$75,000
Priced margin
30%
Forecast margin
Not checked26%
Action
WaitingReviewAgreed
Cost to date + to finishA$38,000 spent, A$17,500 to go26%, down 4 points
Contribution at stakeA$22,500 priced, A$19,500 nowA$3,000 to act on
Weekly reviewOwner and date agreedAction agreed
An A$75,000 office fit-out priced at 30%. The division’s P&L still looks steady.
A$55,500 of cost leaves A$19,500. The margin is 26%, not the 30% priced.
That is A$3,000 less contribution, seen mid-job while the team can still act.
A weekly forecast shows the A$3,000 slide mid-job, while there is still time to act on it.
Illustrative figures, not client data.
In short
A divisional P&L shows the average, so jobs losing margin hide inside it until the final invoice, when it is too late to act.
Contract value less cost to date and a dated cost to finish is today’s forecast; the gap to the priced margin is contribution at stake.
Done well, a short weekly review usually gives the people running each job ownership of its numbers, raises variations earlier and sharpens the next quote.
A division’s monthly P&L can report a steady margin while some jobs inside it slide. The loss shows only when the final invoice goes out, and by then it is a post-mortem.
The useful question for an owner, CEO or board is how much contribution is slipping on live jobs today, and who will act on it this week. Reading a loss-making division shows where job costing fits when a division loses money.
Exhibit 2
One job four points down is A$3,000 of contribution. Twenty of them is A$60,000
One job
26%
Forecast margin on a job priced at 30%
On A$75,000, with A$17,500 to go.
Today
A$3,000
Contribution at stake on that job
A$19,500 forecast, A$22,500 priced.
A book of work
A$60,000
At stake across twenty similar jobs
Each four points down.
Illustrative figures, not client data.
What an early warning is worth
Exhibit 3
Mid-job, J-3104 is four points down: A$3,000 less contribution than priced
Job J-3104
As priced
Forecast now
Contract value
A$75,000
A$75,000
Direct cost
A$52,500
A$55,500 (A$38,000 + A$17,500)
Contribution
A$22,500
A$19,500
Margin
30%
26%
Illustrative figures, not client data.
Exhibit 4 · Try itSee what a live job’s margin slide is costingMove the sliders to match one of your jobs. The calculator compares the margin you priced with the one you’re heading for, shows the contribution at stake in dollars and flags the job under your threshold.Open the calculator ↓Close ↑
Illustrative figures, not a client result or a quote. Direct-cost contribution only: overheads, financing and tax are outside it. Use the same GST treatment for revenue and costs.
The sample is an office fit-out priced at A$75,000 with a direct-cost budget of A$52,500. After A$38,000 spent and A$17,500 to finish, it is four points down: A$3,000 less contribution than planned. These are illustrative figures, not a client result.
Twenty jobs like it put an illustrative A$60,000 of contribution at stake that the monthly P&L may not show until the jobs close. Run your own largest jobs through the calculator.
Seen mid-job, a slide is still a decision: contain rework, raise a variation for extra scope or adjust the next quote. Seen at the final invoice, it can only be explained.
More detail
A few jobs running over budget are offset by others that came in under, so the average stays steady while the slide goes unseen.
The three numbers behind a forecast margin
Exhibit 5
Three numbers on the same cost basis give today’s forecast contribution
01
Contract value
The agreed price plus approved variations.
02
Cost to date
Labour, materials, subcontractors and other direct costs already on the job.
03
Cost to finish
A dated estimate of the remaining work, including materials ordered but not yet billed.
Exhibit 6
Margin and markup give two answers for one job, so agree one
Margin
Contribution divided by revenue
A$19,500 on A$75,000 of revenue: 26%
Markup
Contribution divided by cost
A$19,500 on A$55,500 of cost: about 35.1%
Agree one measure, or a ‘30% job’ means two different things. Sample figures.
Illustrative figures, not client data.
Contract value less cost to date and cost to finish is today’s forecast contribution. Commitments are where forecasts often go wrong. When the bill for ordered materials lands in cost to date, take the same amount out of cost to finish. Count it twice and the job looks worse than it is. Count it nowhere and it looks better.
More detail
This is direct-cost contribution, not net profit: overheads, financing and tax sit outside it. Use the same GST treatment for revenue and costs (excluding GST suits a management view), and the same labour-cost definition in the budget and the forecast.
What it does for the team
Exhibit 7
Four things change when the people running each job own its numbers
01
Ownership
The supervisor owns and dates the cost-to-finish estimate. The project manager answers for the movement.
02
Earlier conversations
A slide is raised mid-job, while a variation can still be agreed.
03
Better pricing
Estimators see how each job tracked against its price. The next quote carries the lesson.
04
One set of numbers
Operations and finance work from the same figures, so month-end brings fewer surprises.
Done well, a weekly check usually changes how the team works.
Questions to put to your team
Exhibit 8
Five questions show whether anyone is watching live job margin
Ask about
Ask
Below the priced margin
Which live jobs are forecast below their priced margin, and by how much in dollars?
Estimate age
When was each cost-to-finish estimate last dated, and by whom?
Commitments
Are ordered materials counted once, in cost to date or in cost to finish but not both?
Margin or markup
Do we report margin or markup, and do our targets use the same measure?
Variations
Which variations are still waiting for the customer’s approval?
Ask these at the next leadership meeting. None needs the job system open. If the answers take a week to assemble, that is the finding.
More detail
A stale estimate is more misleading than a missing one, because it looks complete.
Where automation helps, and where it stops
Exhibit 9 · The workflow
A weekly margin check on every live job
What gets caught: A margin slide is caught at step 4, ‘Forecast margin vs threshold’.
1 of 7 · As priced2 of 7 · Forecast now3 of 7 · Claude reads4 of 7 · Rules match5 of 7 · The slide6 of 7 · A person decides7 of 7 · The outcome
Claude reads
Rules check
A person decides
The job was priced at 30%.
J-3104, an office fit-out: A$75,000.00 with A$22,500.00 to contribute.
Then this week’s costs land.
Cost to date and cost to finish, dated today. It looks routine.
J-3104, as priced
Job as pricedJ-3104
Office fit-out, excl. GST
Contract valueA$75,000.00Agreed with the customer
Direct costA$52,500.00Estimated at pricing
Contribution
A$22,500.00
Margin
30%
Job cost summary J-3104
Job cost summaryJ-3104
Estimate dated today, excl. GST
Cost to dateA$38,000.00Timesheets, bills, POs
Cost to finishA$23,500.00Up A$6,000.00 for rework
Direct cost
A$61,500.00
Contribution
A$13,500.00
Margin
18%
Claude (Anthropic’s AI model) reads both.
Claude turns the price and the cost summary into the same fields. It doesn’t estimate anything.
Plain rules match them, line by line.
The same margin check on every live job, every week.
Read by ClaudeAs priced · J-3104, as priced
Read by ClaudeForecast now · Job cost summary J-3104
Contract valueAs priced: A$75,000.00
✓
Contract valueForecast now: A$75,000.00. Matches
Direct costAs priced: A$52,500.00
✕
Direct costForecast now: A$61,500.00. Doesn’t match
ContributionAs priced: A$22,500.00
✕
ContributionForecast now: A$13,500.00. Doesn’t match
MarginAs priced: 30%
✕
MarginForecast now: 18%. Doesn’t match
✓Estimate dated today
✓No PO in both columns
✕Under the 20% threshold
The slide, in dollars.
The job would contribute A$9,000.00 less than priced.
J-3104 · contribution, excl. GST
As pricedA$22,500.0030%
−40%
Forecast nowA$13,500.0018%
Rework, cost to finish up
A$6,000.00
Over budget before the rework
A$3,000.00
Contribution down
A$9,000.00
Margin down
12 points
Cost to finish rose from A$17,500.00 to A$23,500.00; before that the job was forecast at A$55,500.00 against A$52,500.00 priced.
It waits for the project manager.
Nothing is reported as on track until a person decides. Here, that’s you.
PM
Project managerMonday’s job review
On Monday’s review.
Needs your decision
J-3104’s forecast margin is 18% against 30% priced, after A$6,000.00 of rework. Agree the action and the date, ask the site supervisor to check the estimate, or take it to the division’s leaders?
You decide: pick one to see what happens, or the run goes with “Ask the site supervisor”.
Caught at the weekly check.
Claude (Anthropic’s AI model) reads. Rules check. A person decides.
Action agreedThe movement is explained before the job report goes out.
The action and the date, noted on the job record.
Job systemSample
J-3104 · office fit-outAction agreed
Action
Hold the rework to the A$6,000.00 estimate
Date
Finished by Friday
Owner
Project manager
Job report shared on Monday: 18% forecast against 30% priced, and why.
Agreed by the project manager
Claude read the price and the cost summary into the same four fields, and listed the rework from the supervisor’s site notes. It estimated no costs.
Plain rules found the forecast margin at 18%, under the 20% threshold and 12 points down on the price.
The project manager agreed the action and the date for the rework, with the cost lines behind it.
The job report is shared with operations and finance on Monday, showing 18% and the reason.
On Monday’s reviewNot reported as on track at 18%.
Claude’s question to the site supervisor, sent as a direct message.
Slack Direct message · Site supervisorSample
PM
Project manager8:10 am
J-3104 is forecast at 18% against 30% priced, after A$6,000.00 of rework in the cost to finish. Can you check the rework estimate against your site notes before Monday’s review?
Drafted by ClaudeSent by the project manager
Claude read the price and the cost summary into the same four fields, and listed the rework from the supervisor’s site notes. It estimated no costs.
Plain rules found the forecast margin at 18%, under the 20% threshold and 12 points down on the price.
The project manager asked the site supervisor to check the A$6,000.00 rework estimate. The job stays flagged until it is confirmed.
At 26% (A$19,500.00), still 4 points down, the movement is explained at the weekly review and the job report is shared on Monday.
With the division’s leadersNot reported as on track at 18%.
Claude’s email putting J-3104 to the division’s leaders.
EmailSentSample
From
Project manager
To
Division’s leaders
Subject
J-3104: forecast margin 18% against 30% priced
J-3104, the office fit-out, is now forecast at 18% (A$13,500.00) against 30% (A$22,500.00) priced. Cost to finish rose A$6,000.00 for rework; before that, the job was already A$3,000.00 over its cost budget.
Should we raise a variation with the customer? The cost lines are attached.
J-3104 cost lines.pdf
Drafted by ClaudeSent by the project manager
Claude read the price and the cost summary into the same four fields, and listed the rework from the supervisor’s site notes. It estimated no costs.
Plain rules found the forecast margin at 18%, under the 20% threshold and 12 points down on the price.
The project manager took J-3104 to the division’s leaders, who decide whether to raise a variation with the customer.
At 26% (A$19,500.00), still 4 points down, the movement is explained at the weekly review and the job report is shared on Monday.
Sample data: a fictional job and figures, excl. GST.
ClaudeWhere Claude helps
Organises a supervisor’s approved site notes into open cost items
Drafts questions for the review from the jobs a rule has flagged
Reads supplier bills and suggests the job and purchase order they belong to
RulesWhat the rules check
Forecast margin under the threshold, or down 4 points or more on the price
Cost-to-finish estimate older than 14 days
A commitment counted in both cost to date and cost to finish
PersonWhat a person decides
Supervisor owns and dates the cost-to-finish estimate
Project manager explains the movement and agrees the action
The division’s leaders decide whether to raise a variation with the customer
NoWhat Claude doesn’t do
Invent a cost-to-finish figure
Explain an overrun without evidence in the job record
Change the contract price or send a variation to a customer
Sample data. Claude reads, plain rules check, and you make the decision. Press run to watch it get caught.
Automation brings timesheets, supplier bills and purchase orders into one view per job, so cost to date is current. The gap is usually the dated cost to finish and the commitments.
AI helps at the edges and must not invent a cost-to-finish figure. The estimate belongs to the person running the job. The decision to raise a variation stays with the division’s leaders.
More detail
AI can organise a supervisor’s site notes into open cost items, or draft questions for the review from the jobs a rule has flagged. It should not explain an overrun without evidence.
Before buying another platform, check how the job system and the ledger are connected.
What to do first
Exhibit 10
Reconcile three live jobs by hand before building anything
01Pick the measure
Margin or markup. Use the same one in reports and targets.
02Set the threshold
The margin, and the drop, that put a job on the review list.
03Name the owners
Who owns each estimate and how old it may get. Who reviews the list each week.
04Reconcile three jobs by hand
One straightforward, one with a variation and one close to completion.
05Make it repeatable
Once the team trusts that small sample, build the view.
The first return is an earlier commercial conversation, while there is still time to act. Management reporting that drives decisions covers how to tie these numbers to a regular meeting.
Common questions
How do you calculate the forecast margin on a job?
Add the direct costs already incurred to the estimated cost to finish. Subtract that forecast final cost from the contract value, including approved variations, and divide by the contract value. In the illustrative example, A$75,000 less A$38,000 spent and A$17,500 to go leaves A$19,500: a 26% margin against 30% as priced.
What is the difference between margin and markup?
Margin is contribution divided by revenue. Markup is contribution divided by cost. On A$75,000 of revenue and A$55,500 of cost, contribution is A$19,500: a 26% margin, or about a 35.1% markup. Pick one, name it in your reports and set targets in the same measure.
How often should job margins be reviewed, and by whom?
Weekly for jobs in progress, and again after any material scope change or variation. The supervisor running each job owns and dates its cost-to-finish estimate, the project manager explains the movement, and the division’s leaders review the biggest adverse movements first. A margin found at the final invoice is a post-mortem, not a decision.
Chartered Accountant (CA ANZ) and finance executive, based in Canberra. Practical AI and automation for SMEs, and adviser to owners, CEOs and boards on integration and finance.
Need a weekly job margin report built for your team? Works Better builds it as a single workflow. Want margin, pricing and reporting to change across the business? I lead that hands-on.
Renzo Demartini