Construction Profit Leak Checklist
Most construction companies have blind spots in their financial operations. Check off the items that apply to your business and see exactly where you're losing money.
We don't track job costs in real time — we find out if a project was profitable after it's done
You're flying blind on profitability. By the time you know a job lost money, it's too late to adjust pricing or process.
Our estimates rarely match actual costs, but we don't know why
Systematic estimation errors compound across projects. You're either leaving money on the table or bidding too high and losing work.
We don't have a system to track change orders and their financial impact
Change orders are profit opportunities, but if you're not tracking them, you're either not billing them or not accounting for their cost impact.
Retainage receivables sit uncollected for months
Retainage is often 5-10% of contract value. If it sits unpaid, you're financing your client's cash flow.
We bid on gut feel rather than historical cost data
Without historical data, you're guessing. Some jobs are underpriced, others overpriced. You can't improve what you don't measure.
Our equipment depreciation strategy hasn't been reviewed in over 2 years
Equipment is often your largest depreciable asset. Section 179 and bonus depreciation rules change. You could be missing $10K-$50K in deductions annually.
We don't use WIP (Work in Progress) reporting
WIP is the bridge between cash and profitability. Without it, your financial statements don't reflect the true economic reality of your business.
Subcontractor payments aren't reconciled against contract terms
Subs are often your largest variable cost. If you're not reconciling, you could be overpaying or missing billing opportunities.
We don't know our true overhead rate per job
Overhead is hidden in every bid. If you don't know your rate, you're either underpricing or overpricing every single project.
We've never done a cost segregation study on properties we own
Cost segregation can accelerate depreciation and save $5K-$50K+ in taxes over 5 years. It's a one-time study with years of benefit.
Bonding capacity is limited because our financials aren't lender-ready
Bonding is tied to financial strength. Clean, auditable financials can unlock $500K-$2M+ in additional bonding capacity.
We don't separate direct vs. indirect costs by project
Without separation, you can't see which jobs are truly profitable. You might be cross-subsidizing unprofitable work with profitable jobs.