Where the profit on a job quietly disappears

The measuring instrument for everything below is the monthly CVR: this page is the list of what it usually finds. Six leaks, in rough order of how much they cost.

Leak one: work done and never billed

The biggest, always. Variations completed and absent from every application, dayworks done on a nod and never sheeted, PC adjustments overtaken by real choices and never run. None of this is lost money in the legal sense, it is money you are entitled to and have not asked for, which makes it the cheapest leak to fix: everything earned goes in the next application, the discipline behind the variations page.

Leak two: the free favours

The while-you-are-here socket, the moved radiator, the second skip. Individually decent, collectively a percentage point or two of the job given away, and the client learns the pricing signal: small things are free. The small-extras problem is its own epidemic with its own page; the one-line cure is that small has a price too, and saying it politely is allowed.

Leak three: prelims outliving the programme

Your weekly running costs, supervision, welfare, scaffold hire, the van, were priced for the programme’s duration. Every week the job overruns, they run on unpriced, and an eight-week drift on modest weekly prelims quietly eats what a whole month of measured work earned. Two responses, both covered elsewhere: extensions of time where the delay is the client’s, because time claims are partly prelims claims, and honest programming where it is yours.

Leak four: buying badly and wasting well

Materials priced at the merchant’s list in January and bought in a hurry in June; ten per cent waste priced and fifteen delivered; the pile that walked. Unglamorous, and the habits are unglamorous too: price-check the big packages when they are actually ordered, and treat the skip as a report on your buying.

Leak five: the financing you forgot you were providing

Retention held for a year past completion, then chased for another; final dates drifting a fortnight late every month; the advance you gave the client by paying subs faster than you were paid. Each is your working capital lent at zero per cent, and the meter for it is the cash position page. Money arriving late is margin too, once you count what funding it costs.

Leak six: the downstream account nobody reconciles

Subcontractor accounts drift the same way yours does, in their favour: day rates that crept, extras agreed on site, contra-charges you meant to raise and never papered (properly, with notices). The subcontract account deserves the same monthly look as the client account, and for the same reason.

What to do this week

1. Run leak one on the live job today: list everything done and not yet in an application, and put it in the next one.

2. Pick your worst leak and give it one habit: the confirmation text for extras, the weekly prelims check against programme, the monthly sub-account look. One habit per month sticks; six at once do not.

3. Write the priced margin where you can see it, on the CVR, and treat any monthly drift from it as a question with a name from this list.

Where the information stops

This page assumes the price was right to begin with; a job quoted below cost leaks from a different wound, and no billing discipline cures underpricing. If honest monthly numbers show the margin was never there, the conversation is about your pricing and your overheads, with your accountant, before the next quote goes out.