In construction, it’s not enough to know whether your business is making money — you need to know which jobs are making money… and which ones aren’t. Tracking profit by project is one of the most powerful ways to take control of your margins, improve decision-making, and grow a more profitable construction business.
In this guide, we’ll walk through why it matters, how to do it effectively, and what tools you can use to stay on top of your numbers.
🧱 Why Tracking Profit by Project Matters
Most construction businesses work on multiple jobs at once. Without project-level reporting, you’re left guessing which projects are:
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Running over budget
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Slipping on timelines
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Losing money on labour or materials
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Propping up other loss-making jobs
When you track profit by project, you gain clarity on:
✅ Which types of jobs are most profitable
✅ Which clients, teams, or sites consistently deliver
✅ Where to tighten up quoting or site controls
✅ How to improve cash flow and forecasting
📊 What You Should Be Tracking on Each Project
To accurately track profit per job, you need to monitor:
1. Revenue (Invoiced & Accrued)
Track all income related to each project:
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Client invoices
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Retentions
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Variations and extras
Make sure you match revenue with the period it relates to (accruals), not just when cash comes in.
2. Direct Costs
These are costs tied directly to the job:
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Labour (internal and subcontractors)
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Materials and plant hire
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Site-specific travel and expenses
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Specialist consultants or engineers
3. Overheads Allocated
Some overheads (e.g. project management, admin time) should be proportionally allocated to each job, especially for larger projects.
4. Gross Profit
Revenue minus direct job costs. This shows how efficiently the project was delivered.
Tracking gross margin helps spot which projects are consistently over- or under-performing.
🧮 How to Track Profit by Project – Step by Step
✅ Step 1: Set Up Job Codes or Project Numbers
Use consistent job codes in your accounting or job management system so you can allocate every invoice and expense to the right project.
✅ Step 2: Create a Budget or Quote Breakdown
Don’t just enter a total price — break it down by:
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Labour
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Materials
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Subbies
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Contingency
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Profit margin
This will help compare budget vs actual as the job progresses.
✅ Step 3: Allocate All Costs to Projects in Real Time
Don’t wait until month-end — code your costs (labour, supplier invoices, etc.) to the correct job as they come in.
✅ Step 4: Run Monthly Job Cost Reports
Review each project’s performance monthly (or even weekly on larger jobs). Look at:
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Revenue to date
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Costs to date
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Projected final margin
This helps you catch issues before the project ends.
✅ Step 5: Review Lessons Learned After Completion
When the job is done, do a post-project review:
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Was it on budget?
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Did the labour hours match the quote?
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Were materials overspent?
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What could be improved?
⚙️ Tools You Can Use to Track Profit by Project
You don’t need complex software to get started — but good systems make it easier.
Accounting Software
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Xero / QuickBooks – With tracking codes or classes by project
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Sage 50 / 200 – More detailed cost centres and project tracking
Construction Project Management Tools
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Buildertrend, Procore, CoConstruct, Eque2 These let you combine site activity with budgeting and cost control.
Spreadsheets (if needed)
For smaller firms, Excel or Google Sheets can work — as long as you’re consistent and update them regularly.
🚫 Common Mistakes to Avoid
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Only tracking total company profit, not individual jobs
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Not separating materials vs labour in budgets
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Allocating costs late (or not at all)
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Ignoring overhead recovery
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Not reviewing project performance regularly
👷♂️ Need Help Setting Up Project Profit Tracking?
At Thomas Emlyn Ltd, we help construction businesses:
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Build profit-by-project reports
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Integrate job tracking with Xero or Sage
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Set up cost control systems tailored to your workflow
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Review job performance to improve future quoting
📞 Book a free discovery call — and start seeing exactly where your money’s made (or lost).
📌 Final Thoughts
If you want more control over your margins, project-level reporting is non-negotiable.
Don’t wait until year-end to find out where you made or lost money. With the right setup, you can see real-time job performance, improve quoting, and grow a healthier, more profitable business.
