Job costing tracks every dollar of labour, materials, equipment, subcontracts and overhead against the job it belongs to, and compares it with what you estimated. It tells you whether a job is making or losing money while it is still running, not months later when the year-end accounts are done. Without it, a busy, profitable-looking month can hide jobs that are quietly losing margin.
Profit and cash arrive at different times. You pay wages, suppliers and subcontractors before the client pays you, holdback is kept back until the end of the job, and extras that have not been priced and approved sit unbilled. Tracking what you are owed, what you owe, and when each payment is due is how you see a cash squeeze coming before it hits.
A change order (often called a variation) is a written agreement to change the scope, price or schedule of the original contract. To get paid, get the instruction in writing before doing the work, price it promptly with backup such as quantities, rates, labour and time, submit it formally, and track it until it is approved and invoiced. Most unpaid extras start as work done on a verbal instruction that was never priced.
A change order adjusts your contract with the client, usually adding money for extra work. A backcharge is a cost you recover from someone else, usually a subcontractor or supplier, for work you had to fix, clean up or complete on their behalf. Both depend on clear records: dates, photos, quantities and who instructed what.
Price from a consistent library of items and rates instead of starting every bid from scratch, use a take-off for quantities, keep material prices up to date, and compare finished jobs against their estimates so your rates reflect what the work really costs you. A good estimate also states clearly what is included and excluded, which protects you when the scope changes.
Since August 29, 2022, Alberta’s Prompt Payment and Construction Lien Act sets payment deadlines. Contractors give the owner a proper invoice at least every 31 days, and the owner must pay within 28 days unless it issues a notice of dispute within 14 days. Contractors must pay their subcontractors within 7 days of being paid, and generally within 35 days of the proper invoice even if the owner has not paid, unless they issue a notice of non-payment. This is general information, not legal advice; check the Act or a construction lawyer for your contract.
In Alberta, owners must hold back 10% of the value of work done and materials supplied. It is normally held for 60 days after the certificate of substantial completion (90 days for concrete work), then released if no liens are registered. On larger, longer contracts the Act requires holdback to be released in stages. Track the holdback on every contract and its release date: it is your money, and it is easy to forget.
Earned value compares the value of work actually completed with what it has cost so far and what you planned to have done by now. It answers the question a simple budget-versus-spend figure cannot: are we over budget for the progress we have made? It is one of the clearest early warnings that a job is heading for a loss.
When the same numbers are typed into several spreadsheets, when only one person understands the files, when change orders or invoices slip through the cracks, or when you cannot see a job’s real position without a day of reconciling. Spreadsheets work for one person and a few jobs; once a team and several projects are involved, one shared system saves time and stops costly errors.
Put every commitment on a purchase order or subcontract with an agreed price before work starts, check invoices against what was ordered and delivered, track variations and backcharges against each subcontract, and check payment applications against actual progress on site. Ordering materials early from a complete project list also helps you lock in better prices.
A Quantity Surveyor (QS) manages construction costs and contracts: measuring quantities, pricing work, valuing progress, assessing changes and variations, and keeping the final account under control. In Canada the role is often called a cost consultant, estimator or commercial manager. Cost2Profit was developed by a Quantity Surveyor with 25+ years of experience across five countries.
Cost2Profit is construction management software from Blue Delta Creations for small and medium-sized contractors. It covers estimates, contracts, purchase orders, change orders, payments and cost reports in one browser-based system, so your whole team works from the same numbers. Plans start with a free tier, and the Inner Circle offer gives 10 founding contractors a package worth about $595 a month for free.