More Revenue, Less Cash? The Silent Profit Killer Hiding in Your Job Costs.
It's one of the most frustrating paradoxes in the contracting world: You see the top line revenue grow year after year, you're signing bigger deals, and your team is busier than ever... but your bank balance looks anemic. Where is the money going?
If you’ve experienced this, you are not alone. It’s an incredibly common leak in the landscape, hardscape, and construction industries. And the biggest culprit is not a single, giant hole—it’s a thousand small, untracked leaks created by the lack of one critical component: a financial feedback loop.
When you're running multiple, varied projects (hardscape installs, landscape maintenance, custom construction), each with different crews, materials, and cost structures, a simple P&L review at the end of the month is simply too late.
You need to shift from passive bookkeeping to active, forensic job tracking.
The $100K Question: Why Doesn't Revenue Guarantee Profit?
The reason the cash is disappearing is often that you don't know the expected profit of a job until you know the actual cost—and by the time you find out, the crew has moved on to the next site.
The core issue is a missing granular expectation at the start of the job. You have a total bid, but do you have a truly detailed budget broken down into phases and cost types?
To stop this silent profit killer, you must apply precision to your project start line:
Granular Budgeting: Before the first shovel hits the dirt, define what your costs should be for every major component: labor hours (by crew/phase), specific material quantities (gravel, pavers, plants), and subcontractor fees.
Segment Your Work: Don't lump "labor" into one line item. A hardscape install has vastly different labor efficiencies and material ratios than a commercial maintenance contract. Track them separately so you can clearly see which part of the business is truly driving profit.
The Power of "The Off-By": If you only track the final job cost against the final bid, you know you're "off," but you don't know why. By tracking against a granular budget, you can point directly to the cause: “We budgeted 40 hours for excavation, but the crew took 65 hours,” or “We over-ordered pavers by 10%.” This is the essential data point needed to fix your estimating and execution processes.
Build the Bridge: Turning Budgets Into a Live Scoreboard
The fix is about transforming your budget from a static document into a live scoreboard.
As costs come in (time sheets, material invoices), they must be tracked against the granular budget immediately. This allows you to identify issues while the project is still running.
The feedback loop is bidirectional:
Stop the Bleeding: You catch the cost overrun before it sinks the job and can pivot the execution plan.
Double Down on Wins: You discover you are wildly better than expected on a certain task. Knowing this allows you to increase your margin on similar future jobs or optimize your crews for that specific kind of work.
The Post-Completion Pothole: Accounting for Warranty Costs
Finally, there is one major gap that often drains cash after the job is complete: Warranty Costs.
If you are not tracking the time and materials spent on warranty work, you are effectively paying for previous mistakes out of your current cash flow. Warranty work is a cost of poor installation or poor materials selection.
Your action item: Track every minute and every dollar spent on warranty calls. If you see high warranty costs related to a specific crew, material, or installation process, it tells you exactly where you need to invest in training or process refinement to stop the future leak.
By implementing this granular job costing and closing the financial feedback loop, your rising revenue will finally have a direct, positive correlation with your rising bank balance.
Your Next Step
Take the next two jobs you start this week and do one simple thing: break the labor hours budget down by phase (e.g., Demolition, Installation, Finishing). Track the actual labor hours against those specific phase budgets. Where are you off, and why?