Job Profitability Review: Compare Your Quote with Actual Costs

Use this after a job has enough cost information to review. If a subcontractor invoice is still missing, mark the review provisional and show the estimate. A missing bill can make the job look more profitable than it is.

Freeze the quote you are comparing against

Save the accepted scope, price, estimated hours and purchase assumptions. Record later approved changes in a separate column. Changing the original estimate to match the result hides what you need to learn.

Bring in timesheets, material receipts, travel records and rework notes using the same job reference. Business.gov.au recommends comparing actual results with the budget; the example below applies that check to one job.

Follow the loss from estimate to actual

Assumptions: Fictional Australian-dollar management-costing example. Amounts exclude GST that is assumed recoverable; any non-recoverable tax is already included in costs. These assumptions do not establish your GST entitlement. Contribution is before unallocated overheads and income tax.

Item	Estimated cost	Actual cost	Cost increase
Delivery labour at $50/hour	20 h: $1,000	25 h: $1,250	$250
Materials	$650	$730	$80
Travel and job-specific costs	$150	$170	$20
Rework labour at $50/hour	$0	3 h: $150	$150
Total modelled cost	$1,800	$2,300	$500
Contribution on $3,000 revenue	$1,200	$700	−$500
Contribution margin	40.00%	23.33%	−16.67 percentage points

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

The 25 delivery hours exclude the three rework hours, so actual labour is 28 hours in total. The internal $50 hourly rate is a fictional delivery-cost assumption, not an award rate or a suggested selling rate. Any business overhead absent from it still needs recovering from the $700 remaining.

If the owner performed the work, show their time in this management comparison using a chosen internal cost. Don't relabel sole-trader drawings as a wage in the accounting system. If an employee did it, use an appropriate verified employment cost rather than the hourly wage alone.

Decide what the variance means

Five extra delivery hours might mean the estimate missed site preparation. They might instead reflect a customer asking for extra work. Those need different responses: revise the normal estimate for the first; review the scope-change record for the second. Rework needs its own cause so it doesn't become an unquestioned allowance in every future job.

In this example, suppose the notes identify three hours of omitted preparation and two hours of unexpectedly difficult access. The next quote template can add preparation as a visible task and ask an access question before estimating. The $80 material increase belongs to a supplier-price check; it doesn't justify increasing the hours allowance.

Keep revenue changes equally visible. An approved $250 addition would raise contribution to $950 if it created no further costs. If that addition required another four hours, cost those hours too. Don't celebrate the extra invoice value without following the work behind it.

Turn the review into a repeatable worksheet

Use columns for task, estimated quantity, estimated cost rate, actual quantity, actual cost rate, variance, evidence and next action. Give each action an owner and a date. Keep quality fixes with the people delivering the work, and supplier changes with whoever buys materials.

Review a few comparable jobs before changing every price. A single difficult site isn't proof that all jobs need a permanent surcharge. Look for a repeated cost, an identifiable risk or a scope question you can resolve earlier.

For future quotes, business.gov.au's quote guide is a useful scope and paperwork check. The completed cost review doesn't itself authorise charging a customer more than the agreement allows.

Where to get help

Check the hourly-rate foundations, then review how overhead is allocated or record quote uncertainty. Compare the job with the overall profit and loss. More worksheets sit in the pricing and profit hub.