Busy all year, and the margin is a mystery
You installed a lot of air conditioning this year. The accounts show a modest profit overall. Which jobs made money? The office thinks the big fit-out lost money because the pipe runs were longer than surveyed. The engineers think the small domestic jobs lose money on travel. Nobody can prove either, because costs arrive separately and are allocated loosely.
Costs arrive from everywhere
An install job's costs come from timesheets, supplier invoices for units and materials, copper and fittings from van stock, refrigerant from cylinders, access equipment and crane hire, subcontracted electrical work. Each has a different source and a different timing. Many are not coded to the job, or are coded to the wrong one.
Air conditioning installs also vary more than they look. Two jobs with the same indoor units can differ hugely in pipe run, condensate route, access and out-of-hours working, so an average margin across the year hides the jobs that lose money.
- Supplier invoices cover several jobs and are not split.
- Van stock used on jobs is not recorded.
- Engineer hours are reported by day, not by job.
- Hire costs arrive weeks later.
- Nobody compares actual costs with the quote lines.
What not knowing costs
Pricing decisions made on instinct. Job types that consistently lose money continue to be quoted the same way. Variations that should have been charged are missed because nobody saw costs overrunning. And the business grows in turnover without knowing whether it grows in profit.
Refrigerant is a particular blind spot. It is taken from cylinders on the van, the quantity is sometimes recorded for F-gas purposes but rarely costed, and on a large system it is a significant part of the job that never reaches the job's cost line.
The job costing we build
- Each accepted quote becomes a costing budget by line: equipment, pipework, electrics, access, labour, refrigerant.
- Engineers record time against jobs in their app, which feeds the labour line at your costed rates.
- Supplier invoices are read and their lines matched to jobs from purchase orders or references, with anything unclear sent to a person.
- Materials taken from van stock and refrigerant from cylinders are recorded against the job when used.
- Hire and subcontract costs are allocated when raised, not when invoiced, using committed costs.
- A job view shows budget versus actual by line, live, with variances flagged, and a closed-job report summarises margin by job type.
| Cost | Allocated now | Allocated with job costing |
|---|---|---|
| Labour | By day | By job from the app |
| Supplier materials | Invoice not split | Lines matched to jobs |
| Van stock and refrigerant | Not recorded | Recorded when used |
| Hire | When the invoice arrives | When committed |
| Comparison | Nobody does it | Budget versus actual by line |
Knowing which work pays
Project managers see overruns while there is still time to raise a variation. The closed-job reports show which job types and sizes make money, which informs pricing and which work to pursue. Estimators get feedback on their assumptions. And the year-end profit stops being a surprise.
Engineers also see the effect of their work on the job. When a site team can see that a job is running over on pipework, they have a reason to raise it early, and the variation can be agreed while the client is still on site.
Do you recognise these?
- You cannot say which installs made money last year.
- Supplier invoices are not split across jobs.
- Engineer time is not recorded by job.
- Hire costs arrive long after the job closes.
- Estimators never see how their quotes compared with actuals.