Running a Mid-Job Cost Review

Pull all purchase orders raised against the job and sum the total committed cost. Compare against the materials and sub-contractor budget from the original quote.

Pull labour hours recorded to date from works order completions, site sign-offs, or timesheets. Compare actual hours against the labour estimate from the quote by trade or role.

Identify any costs incurred but not yet on a PO or works order: van stock used without a job booking, verbally instructed sub-contractor work, or deliveries received without a linked PO. Raise the missing documents now.

List any out-of-scope work already completed that has not been priced or authorized in writing. These are variations absorbed without a signed change order.

Estimate the cost to finish the remaining scope using actual cost rates from this job, not the original quote. If labour is running over estimate, apply the actual rate to the remaining hours.

Add actual costs to date and estimated cost to complete to get the estimated final cost. Compare against the original job budget to calculate projected final margin.

If projected margin is more than 5% below target, raise written variation orders for out-of-scope work, update remaining POs, and notify the customer of any cost or timeline change before the final invoice is issued.

We only checked job costs when we raised the final invoice - by then we had already done the work and had no way to recover the overspend.

Labour hours were running 30% over estimate but nobody flagged it until the job closed. We invoiced at the original price and absorbed over $1,800 in unrecovered time on a single job.

A sub-contractor did extra work on site and billed us on completion. We had no written instruction and could not pass the cost through to the customer.

When should we run a mid-job cost review?

For jobs over $5,000 or lasting more than two weeks, run a review at roughly the halfway point. For shorter jobs, trigger a review when a major cost event occurs - a large delivery arrives, a sub-contractor completes their work, or a customer change request comes in. The goal is to catch overruns while the job is still in progress and options exist.

What is the difference between estimated cost to complete and estimated final cost?

Estimated cost to complete (ETC) is the projected cost of finishing the remaining scope. Estimated final cost is the total: actual costs to date plus the ETC. Compare estimated final cost against your original job budget to determine whether the margin will hold. It is the estimated final cost figure that tells you whether a corrective conversation with the customer is needed.