Real profit = Total billed value − Total actual cost
Start with total actual cost
Add the internal labour cost, material cost excluding VAT and subcontractor cost assigned to the job. Keep the categories visible so the result can be explained later.
Total actual cost = Actual labour + Actual materials + Actual subcontractors
Use billed value, not estimated selling value
The estimate describes what was expected before construction. Quantities and scope often change. The billed value records the work submitted for payment and can be added in several stages. That makes it the appropriate value to compare with actual cost for the current real result.
Example
A completed electrical job has:
- Billed labour: €7,500
- Billed materials: €4,200
- Billed subcontractors: €0
- Actual labour cost: €5,100
- Actual material cost: €3,650
- Actual subcontractor cost: €0
Total billed value is €11,700. Total actual cost is €8,750. Real profit is €2,950.
€11,700 − €8,750 = €2,950 real profit
Profit by job reveals more than profit by project
A project can remain profitable even when one job loses money. The loss matters because that job may be repeated in future estimates. Reviewing profitability per job exposes weak rates, low productivity, unexpected quantities or subcontractor pricing that needs attention.
What about unfinished work?
A current positive result is not necessarily final profit. More labour, materials or subcontractor costs may still arrive, and completed work may not yet be billed. Treat an in-progress result as a live position, not a final account.
Keep all three views
- Estimate vs actual explains budget performance.
- Billed vs actual explains real profit.
- Job vs project explains where the result came from.
Explore ActualCost profitability tracking.