You have to have sufficient gross profit on each project to cover your overhead and profit.
Knowing your margins can help you price your projects correctly.
This app can help you do that.
Check your Chart of Accounts to ensure that all direct costs (expenditures that can be related to a specific project) and all project-related indirect costs (supervisor, utilities, etc.) are included in the Direct Costs (or Cost of Goods Sold – COGS) section of the statement.
If you are tracking job costs, you can analyze one project or a group of projects to determine if they are meeting your target numbers.
You might want to analyze:
all projects estimated by one estimator;
all projects run by one site supervisor;
or any other performance metrics you would like to see.
The target margin percentages for Direct Costs (or Cost of Goods Sold – COGS) and Overhead are defaulted. Adjust any of the target margin percentages to match your business model.
Enter the information requested in the “Actual $” column. This information is found on the latest Income Statement for your company.
Check the resulting calculations shown in the “Actual %” column against the “Target %” column to determine where the variances are.