"I work flat out, but by the end of the year there's not much left." It's one of the most common things you hear from tradespeople. The problem is rarely the order book — it's that you don't know, job by job, **where the money goes**. You add up the revenue, glance at the bank balance, and hope.
Tracking a job's profitability isn't accounting, and it isn't complicated. You just connect three numbers you already have: what you invoice, what you buy, and the time you spend. Here's how.
Why think per job (not per month)
A monthly view mixes everything: a good job covers a bad one, and you never see which one cost you money. Thinking **per job** isolates each one and reveals the patterns: a type of client, a type of work, or a badly priced quote that keeps coming back in the red.
- You stop repeating the quotes that never turn positive.
- You know which jobs to decline, or re-price higher.
- You negotiate better: a real margin figure beats any gut feeling.
The three numbers that make the margin
1. Reference revenue
This is what the job will bring in, net of VAT. Until the invoice is issued, use the **signed quote** amount. Once invoicing starts, use the **invoiced amount** — so you never underestimate what's actually committed.
2. Expenses (purchases & materials)
Every purchase tied to the job: materials, equipment hire, subcontracting, waste removal. The habit that changes everything: **photograph each receipt** and link it to the job that same day. By the end, the total is already done — no shoebox of receipts to sort through later.
3. Labour cost
This is the line almost everyone forgets, and it's often the one that eats the margin. Count the time spent on the job (half-days are plenty precise) times a cost per half-day per person. If you plan your crew by half-day, this calculation does itself.
The maths, in plain terms
Once you have the three numbers, the margin reads in one line:
- **Gross profit** = revenue − expenses (purchases & materials).
- **Net profit** = gross profit − labour cost.
- **Net margin %** = net profit ÷ revenue × 100.
| Item | Amount |
|---|---|
| Revenue (signed quote) | €8,420 |
| Purchases & materials | − €3,180 |
| Labour (8 half-days) | − €1,540 |
| Net profit | €3,700 |
| Net margin | 44% |
A net margin above 25% is generally healthy for a renovation job. Between 10% and 25%, stay alert. Below 10%, the smallest surprise (a snag, a redo, a late payment) tips you into the red.
Why seeing it in real time matters
Computing the margin **after** the job is useful for next time. Computing it **during** is what lets you react: chase a deposit, stop a runaway in purchases, or re-invoice a change the client asked for mid-job. The real value isn't in the final figure — it's in watching it move while you can still act.
The three most common mistakes
- Forgetting labour: a job that looks profitable on paper goes negative the moment you count the hours actually spent.
- Linking purchases to nothing: with no purchase → job link, it's impossible to know where the materials went. Photograph and link as you go.
- Confusing cash flow with profitability: having money in the account because a client paid a deposit doesn't mean the job is profitable. They're two separate things to track.
Tracking profitability doesn't mean becoming an accountant. It means giving yourself the means to say "that job, never again at that price" — and to say it with a number, not a hunch.