You just finished a service call in West Des Moines. Troubleshot a tripping breaker, replaced a faulty GFCI outlet, upgraded a subpanel to handle additional load. Three hours on site. You charged the customer $685.

Was that profitable?

Your gut says "probably." You know your labor rate is $145 per hour. Three hours = $435 in labor. Plus materials markup. Seems good, right?

But here's what you don't actually know:

• What did that service call really cost you when you factor in drive time, truck expenses, overhead allocation, and burden?
• Did you make $300 profit or $50 profit or actually lose money?
• Which types of service calls are your most profitable, and which are killing your margins?
• Should you be charging $145/hour or $185/hour based on your true costs?
• Are your commercial service calls more profitable than residential, or vice versa?

You have no idea. And neither does your bookkeeper. And neither does your generic CPA.

The uncomfortable truth: Most Des Moines electrical contractors are running blind. They know their total revenue. They know their bottom-line profit at year-end. But they have zero visibility into which services, which job types, and which customers are actually making them money.

You're making decisions about pricing, staffing, and business strategy based on gut feel and hope—not data. You're like a pilot flying in fog without instruments, hoping you don't crash.

This is insane. You're running a million-dollar business (or trying to build one) without knowing which parts of your business actually generate profit.

Here's what happens when you don't track job costs:

Service call pricing disaster: You think you're profitable at $145/hour because "that's the market rate." You don't realize your true loaded cost is $127/hour, leaving you $18/hour margin—which evaporates the moment a job takes 15 minutes longer than estimated or you have to make a second trip for a part.

Money-losing customers: You have three commercial property management companies that give you steady work. One is wildly profitable. One breaks even. One loses you $12,000 annually because their jobs consistently run over estimate, they nickel-and-dime change orders, and they slow-pay invoices. You don't know which is which, so you keep servicing all three equally.

Unprofitable service lines: Your residential panel upgrades are consistently profitable. Your commercial tenant improvement work is break-even at best. Your generator installations lose money on 60% of jobs because you're under-estimating labor hours. You keep bidding more generator work because "it seems like it should be profitable."

Pricing that destroys margins: You bid a commercial lighting retrofit at $28,500 because that's what you think it should cost. Actual costs come in at $31,200. You lost $2,700 and have no idea why because you're not tracking labor hours, material costs, and overhead allocation by job.

This happens every month to electrical contractors across Des Moines, Ankeny, West Des Moines, Johnston, Grimes, Clive, and Waukee. Not because they're bad businesspeople—but because nobody taught them job costing and their generic CPA doesn't provide it.

This isn't another generic "track your expenses" article. This is a comprehensive framework for implementing real job costing in your electrical contracting business—so you finally know which jobs make money, which customers are worth keeping, and what you should actually charge to be profitable.

Let's fix your blind spots.

Why Most Electrical Contractors' "Job Costing" Is Actually Just Expense Tracking

The QuickBooks Job Feature Isn't Job Costing (And Why Your Bookkeeper Doesn't Know the Difference)

Here's the most common scenario when Des Moines electricians ask about job costing:

Electrician: "Do we have job costing set up?"

Bookkeeper: "Yes, we use QuickBooks jobs. Every expense gets coded to a project."

Electrician: "Great, so can you tell me which jobs were profitable last month?"

Bookkeeper: "Um... I can tell you how much we spent on each job and how much we billed. You can subtract and see the difference?"

This is not job costing. This is expense tracking with job labels.

What your bookkeeper is doing:

• Recording material purchases and coding them to jobs
• Recording labor hours and associating them with jobs
• Recording subcontractor invoices by project
• Maybe tracking some direct costs

What your bookkeeper is NOT doing:

• Allocating overhead costs to jobs (shop rent, utilities, office staff, insurance)
• Calculating burden on labor (payroll taxes, workers comp, benefits)
• Tracking actual hours vs. estimated hours
• Measuring productivity and efficiency
• Analyzing job profitability by type, customer, or service line
• Providing actionable insights on pricing

Example of the difference:

Job tracking (what most electricians have):

Johnson Residence Panel Upgrade
Revenue: $8,500
Labor: $2,100
Materials: $1,850
Total Direct Costs: $3,950
Gross Profit: $4,550 (54% margin)

Looks great, right? 54% gross margin!

Actual job costing (what you need):

Johnson Residence Panel Upgrade
Revenue: $8,500

DIRECT COSTS:
Labor (18 hours × $35/hr base wage): $630
Labor burden (payroll taxes, workers comp, benefits at 42%): $265
Total loaded labor cost: $895
Materials (actual invoiced cost): $1,850
Permit fees: $185
Disposal fees: $45
Total Direct Costs: $2,975

OVERHEAD ALLOCATION:
Shop/warehouse (18 hrs × $12/hr): $216
Vehicle costs (18 hrs × $8/hr): $144
Small tools/consumables (18 hrs × $3/hr): $54
Office/administrative (18 hrs × $7/hr): $126
Insurance (18 hrs × $4/hr): $72
Marketing/business development (18 hrs × $2/hr): $36
Total Overhead: $648

TOTAL JOB COST: $3,623

Gross Profit: $4,877
Gross Margin: 57%
Net Profit (after overhead): $4,229
Net Margin: 50%

Now you know: This job was actually MORE profitable than your basic tracking showed, but only because we properly allocated all costs.

But here's a different job with the same basic tracking:

Martin Commercial Tenant Improvement:

Revenue: $12,500
Labor: $3,200
Materials: $2,850
Total Direct Costs: $6,050
Gross Profit: $6,450 (52% margin)

Looks solid, right?

Actual job costing:

Revenue: $12,500

DIRECT COSTS:
Labor (48 hours × $35/hr): $1,680
Labor burden (42%): $706
Total loaded labor: $2,386
Materials: $2,850
Subcontractor (HVAC coordination): $800
Permit fees: $285
Total Direct Costs: $6,321

OVERHEAD ALLOCATION:
Shop/warehouse (48 hrs × $12/hr): $576
Vehicle costs (48 hrs × $8/hr): $384
Small tools/consumables (48 hrs × $3/hr): $144
Office/administrative (48 hrs × $7/hr): $336
Insurance (48 hrs × $4/hr): $192
Marketing/business development (48 hrs × $2/hr): $96
Total Overhead: $1,728

TOTAL JOB COST: $8,049

Gross Profit: $6,179
Gross Margin: 49%
Net Profit (after overhead): $4,451
Net Margin: 36%

This job is significantly less profitable than it appeared. 36% net margin vs. 52% gross margin. If you're making decisions based on basic expense tracking, you think this job type is more profitable than it is.

The critical difference: Job costing allocates ALL costs to jobs—not just direct materials and nominal labor. It shows you true profitability, not just gross margin.

Your generic CPA isn't providing this because they're doing compliance work (tax returns and financial statements), not management accounting. They're not analyzing which jobs make money.

For electrical contractor accounting: Electrician Accounting Services

The Service Call vs. Project Work Profitability Blindness

Most electrical contractors operate two fundamentally different businesses under one roof:

Business Model 1: Service/Repair Work

• Residential service calls
• Commercial maintenance
• Troubleshooting and repairs
• Emergency after-hours work
• Small one-time jobs

Business Model 2: Project Work

• New construction electrical
• Tenant improvements
• Panel upgrades and service changes
• Lighting retrofits
• Generator installations
• Major remodels

These require completely different costing approaches, and most electricians treat them identically.

Service call characteristics:

• Short duration (1-6 hours typically)
• High labor-to-materials ratio
• Drive time is significant percentage of total time
• Pricing often based on flat rate or time-and-materials
• Profitability depends on efficiency and minimizing callbacks

Project work characteristics:

• Longer duration (days to weeks)
• Significant material costs
• Drive time is small percentage of total time
• Pricing typically based on estimate/bid
• Profitability depends on accurate estimating and scope management

Where electricians go wrong: Using the same overhead rates and profitability analysis for both business models.

Example - Overhead allocation problem:

Your annual overhead costs:

• Shop rent: $24,000
• Office staff: $65,000
• Vehicles: $48,000
• Insurance: $32,000
• Marketing: $18,000
• Utilities/misc: $15,000
• Total: $202,000

Your annual labor hours: 4,800 billable hours across 3 techs

Blended overhead rate: $202,000 ÷ 4,800 = $42.08 per labor hour

Using blended rate for service call:

Residential Service Call (3 hours on-site, 1 hour drive time)
Revenue: $685
Labor (3 hrs × $35): $105
Labor burden (42%): $44
Materials: $75
Overhead (4 hrs × $42): $168
Total Cost: $392
Profit: $293 (43% margin)

Looks profitable.

But here's reality: Service calls have disproportionately high vehicle costs (drive time), higher marketing costs (one-time customers vs. repeat project clients), and higher administrative costs (invoicing, dispatching, customer management per dollar of revenue).

Using activity-based costing for service call:

Residential Service Call
Revenue: $685
Labor (3 hrs × $35): $105
Labor burden (42%): $44
Materials: $75
Vehicle/drive time (1 hr + mileage): $45
Dispatch/scheduling: $12
Marketing (customer acquisition cost): $35
Invoice/payment processing: $8
Insurance allocation: $15
Other overhead: $18
Total Cost: $357
Profit: $328 (48% margin)

Wait, it's MORE profitable?

Not necessarily—depends on your actual cost structure. The point is: You don't know until you track it properly.

For some electrical contractors: Service calls are wildly profitable (especially emergency after-hours work with premium pricing)

For others: Service calls are break-even or loss leaders that feed into more profitable project work

For most: They have no idea which is true because they're using blended rates that obscure reality

Without proper job costing by business model, you're making strategic decisions blindly:

• Should we focus more on service work or project work?
• Should we raise service call rates?
• Is our after-hours emergency service profitable enough to justify 24/7 availability?
• Should we hire another service tech or another project installer?

You're guessing. And guessing wrong costs you $30,000-80,000 annually in suboptimal business decisions.

For construction job costing: Construction Job Costing Services

The "We Track Labor Hours" Myth That Costs $50,000+ Annually

Conversation I hear constantly:

Me: "Do you track actual labor hours by job?"

Electrician: "Yes, my guys fill out timesheets."

Me: "Great, let's look at last month's jobs and compare estimated vs. actual hours."

Electrician: "Oh, we don't compare them. We just track for payroll."

This is not job costing. This is payroll processing.

What "tracking hours for payroll" means:

• Tech writes down "8 hours Monday, 8 hours Tuesday..." for the week
• Maybe notes which job site they were at
• Gets paid based on total hours
• No analysis of efficiency, productivity, or estimate accuracy

What job costing requires:

• Estimated hours by task for each job
• Actual hours by task tracked daily
• Variance analysis (actual vs. estimate)
• Productivity metrics
• Root cause analysis when jobs run over

Example - Panel Upgrade Job:

Your estimate:

Panel Upgrade - Smith Residence
Estimated Hours:
- Site assessment/planning: 0.5 hrs
- Material pickup/staging: 1.0 hrs
- Permit: 0.5 hrs
- Disconnect/demo old panel: 1.5 hrs
- Install new panel: 2.0 hrs
- Circuit labeling/testing: 1.0 hrs
- Cleanup/inspection: 0.5 hrs
Total Estimated: 7.0 hours
Labor cost: $245 (7 hrs × $35)
Quoted price: $2,850 (7 hrs × $145 labor rate + $835 materials + margin)

What actually happened (without job costing):

Tech timesheet: "8 hours - Smith job"
Actual cost recorded: $280 (8 hrs × $35)

You notice the job ran over by 1 hour. Why?

• Was your estimate wrong?
• Did the tech work inefficiently?
• Was there an unexpected complication?
• Did you under-scope the job?

You have no idea because you didn't track by task.

What job costing would show:

Panel Upgrade - Smith Residence
Actual Hours by Task:
- Site assessment/planning: 0.5 hrs (matched estimate)
- Material pickup/staging: 2.0 hrs (1 hr over - parts house was out of stock, had to go to second location)
- Permit: 0.5 hrs (matched)
- Disconnect/demo old panel: 2.0 hrs (0.5 hrs over - old panel was damaged, difficult removal)
- Install new panel: 2.0 hrs (matched)
- Circuit labeling/testing: 1.5 hrs (0.5 hrs over - customer wanted detailed labeling)
- Cleanup/inspection: 0.5 hrs (matched)
Total Actual: 9.0 hours
Variance: +2.0 hours

Now you know:

• Material pickup overrun (1 hr): Parts supply issue - you should stock commonly needed panel components to avoid this
• Demo overrun (0.5 hrs): Old damaged equipment - not your fault, but you could add contingency time for older homes
• Labeling overrun (0.5 hrs): Customer request beyond scope - should have been change order

Actions you can take:

1. Stock common panel components to eliminate parts pickup delays (saves 1 hr per job × 20 panel upgrades/year = 20 hours = $2,900 recovered annually)
2. Add 1 hour contingency to estimates for homes built pre-1980 (improves estimate accuracy)
3. Clarify scope on labeling in estimates or charge separately for detailed labeling (recover 0.5 hrs per job)

Total annual impact of this one analysis: $4,000-6,000 in recovered labor costs and improved profitability

Multiply by every job type you do, and you're leaving $30,000-80,000 on the table annually by not tracking hours properly.

Your generic CPA has never mentioned this because they're not analyzing your operations—they're just recording historical costs.

For labor tracking and productivity: Contractor Labor Cost Management

Building a Real Job Costing System for Electrical Contractors

Step 1: Establish Your True Loaded Labor Cost

Most electricians know their base wage rate: "I pay my lead tech $35/hour."

Almost none know their loaded labor cost: The true all-in cost of that tech working one hour.

Components of loaded labor cost:

Base Wage: $35.00/hour

Payroll Taxes (employer portion):

• Social Security (6.2%): $2.17
• Medicare (1.45%): $0.51
• Federal Unemployment (0.6%): $0.21
• State Unemployment (Iowa ~2-4%, assume 3%): $1.05
• Subtotal payroll taxes: $3.94 (11.25%)

Workers Compensation Insurance:

• Rate for electrical contractors in Iowa: 8-12% of wages (varies by claims history)
• Assume 10%: $3.50

Benefits:

• Health insurance contribution: $450/month ÷ 173 hrs/month = $2.60/hr
• Paid time off (2 weeks vacation, 1 week sick, 8 holidays = 136 hrs/year): $35 × 136 ÷ 2,080 = $2.29/hr
• Retirement contribution (3% match): $1.05/hr
• Subtotal benefits: $5.94

Non-Billable Time (this is the killer):

• Shop meetings: 2 hrs/week = 104 hrs/year
• Training: 40 hrs/year
• Equipment maintenance: 20 hrs/year
• Travel time (not billed to customers): 3 hrs/week = 156 hrs/year
• Breaks/lunch (paid but not billable): 5 hrs/week = 260 hrs/year
• Slow periods/gaps between jobs: 2 hrs/week = 104 hrs/year
• Total non-billable: 684 hours/year

Billable efficiency calculation:

• Total work year: 2,080 hours (52 weeks × 40 hrs)
• Less PTO: 136 hours
• Available hours: 1,944 hours
• Less non-billable: 684 hours
• Billable hours: 1,260 hours
• Billable efficiency: 1,260 ÷ 1,944 = 65%

True loaded cost calculation:

Direct cost per hour worked:

• Base wage: $35.00
• Payroll taxes: $3.94
• Workers comp: $3.50
• Benefits: $5.94
• Total per hour worked: $48.38

Adjusted for billable efficiency:

• Direct cost: $48.38
• Billable efficiency factor: 1.0 ÷ 0.65 = 1.54
• True loaded labor cost: $48.38 × 1.54 = $74.51 per billable hour

Your tech costs you $74.51 for every hour billed to a customer, not the $35/hour you think.

If you're charging $145/hour labor rate:

• Customer pays: $145
• Your cost: $74.51
• Margin: $70.49 (49%)

Seems great, right?

But add overhead allocation (shop rent, office staff, vehicles, insurance, marketing, etc.):

• Overhead rate: $36/hour (we'll calculate this shortly)
• Total cost per billable hour: $74.51 + $36 = $110.51

Actual margin:

• Customer pays: $145
• Your true cost: $110.51
• Margin: $34.49 (24%)

Not as great. And if your labor rate is $135 or $125, you're barely profitable or underwater.

This is why electricians think they're profitable but have no cash—they're pricing based on base wage, not loaded cost.

For every electrical contractor reading this: Calculate your true loaded labor cost right now. I guarantee it's 40-60% higher than you think.

For labor cost analysis: Contractor Labor Cost Calculator

Step 2: Calculate Your Overhead Rate by Cost Pool

Overhead = All the costs of running your business that aren't directly billable to specific jobs.

Most electricians do this:

Total annual overhead: $285,000
Total annual billable hours: 3,800
Overhead rate: $285,000 ÷ 3,800 = $75/hour

This is wrong because different types of overhead costs should be allocated differently.

Activity-Based Costing approach:

Cost Pool 1: Facility Costs

• Shop/warehouse rent: $30,000
• Utilities: $8,400
• Property insurance: $4,200
• Maintenance/repairs: $3,600
• Total: $46,200
• Allocation basis: Square footage or labor hours
• Rate: $46,200 ÷ 3,800 hrs = $12.16/hr

Cost Pool 2: Vehicle Costs

• Vehicle payments/depreciation: $28,000
• Fuel: $15,600
• Insurance: $9,200
• Maintenance/repairs: $8,400
• Registration/fees: $1,200
• Total: $62,400
• Allocation basis: Drive time + mileage
• For job costing: Track actual vehicle usage per job
• Average rate: ~$8-15/hr depending on job location

Cost Pool 3: Small Tools & Consumables

• Hand tools replacement: $4,800
• Power tools: $6,200
• Consumables (wire nuts, tape, etc.): $8,400
• Safety equipment: $2,400
• Total: $21,800
• Allocation basis: Labor hours
• Rate: $21,800 ÷ 3,800 = $5.74/hr

Cost Pool 4: Office & Administrative

• Office manager salary: $52,000
• Bookkeeper (part-time): $18,000
• Office supplies: $3,600
• Software/subscriptions: $8,400
• Professional services: $6,000
• Total: $88,000
• Allocation basis: Number of invoices/transactions
• Service calls (high volume, low $ per invoice): Higher allocation
• Projects (low volume, high $ per invoice): Lower allocation
• Average rate: $23.16/hr for blended, but should be activity-based

Cost Pool 5: Marketing & Business Development

• Website/SEO: $12,000
• Advertising: $15,600
• Networking/associations: $3,200
• Truck wraps/signage: $4,800
• Total: $35,600
• Allocation basis: Customer acquisition cost by channel
• Residential service (higher acquisition cost): $50-100 per customer
• Commercial project (lower ongoing marketing): $25-40 per customer
• Average rate: $9.37/hr blended

Cost Pool 6: Insurance & Risk

• General liability: $8,400
• Professional liability: $4,200
• Umbrella: $2,400
• Total: $15,000
• Allocation basis: Revenue or labor hours
• Rate: $15,000 ÷ 3,800 = $3.95/hr

Cost Pool 7: Licensing & Continuing Education

• License renewals: $800
• Continuing education: $2,400
• Certifications: $1,800
• Total: $5,000
• Allocation basis: Labor hours
• Rate: $5,000 ÷ 3,800 = $1.32/hr

Total Overhead: $274,000 (close to $285K, with remaining $11K in misc)

Why this matters:

Service Call overhead allocation:

• Facility: $12.16/hr
• Vehicle: $15/hr (higher due to drive time)
• Tools: $5.74/hr
• Admin: $35/call (higher per-hour rate due to invoicing/dispatch)
• Marketing: $75/call (customer acquisition cost)
• Insurance: $3.95/hr
• Licensing: $1.32/hr
• Total: Varies significantly by call, but roughly $45-60/hr

Project Work overhead allocation:

• Facility: $12.16/hr
• Vehicle: $8/hr (lower due to minimal drive time)
• Tools: $5.74/hr
• Admin: $12/hr (lower per-hour rate, spread over many hours)
• Marketing: $8/hr (lower acquisition cost, repeat commercial customers)
• Insurance: $3.95/hr
• Licensing: $1.32/hr
• Total: ~$51/hr

This reveals: Service calls have higher overhead per dollar of revenue than project work (primarily due to drive time and customer acquisition costs).

This should influence your pricing strategy—but you can't make these decisions without proper cost allocation.

For overhead allocation: Construction Overhead Cost Management

Step 3: Implement Time Tracking by Task (Not Just by Day)

Current state for most electrical contractors:

• Tech fills out timesheet at end of week
• Lists total hours each day
• Maybe notes which job site

Required state for job costing:

• Tech tracks time by task throughout the day
• Mobile app makes this easy (not burdensome)
• Data feeds directly to job costing system

Practical implementation:

Option 1: Mobile Time Tracking Apps

• Best for electrical contractors: BusyBusy, ClockShark, TSheets (QuickBooks Time)
• Features needed:
  • GPS location tracking
  • Job/task selection on clock-in
  • Photo attachments
  • Offline capability
  • Integration with accounting software

Option 2: Field Service Management Software

• Options: ServiceTitan, FieldEdge, Housecall Pro
• Advantages: Integrated with scheduling, dispatching, invoicing
• Disadvantages: Higher cost, more complex implementation

What to track:

For Service Calls:

• Drive time to job
• Diagnostic/assessment time
• Repair/installation time
• Material procurement (if mid-job)
• Customer discussion/education
• Cleanup/documentation
• Drive time from job

For Project Work:

• Site layout/planning
• Material staging
• Rough-in by area
• Trim-out by area
• Testing/commissioning
• Punch list
• Cleanup

Example - Service Call Time Tracking:

Old way:

Tech timesheet: "4 hours - Wilson residence"

New way:

10:00 AM - Clock in (drive to job)
10:22 AM - Arrive on site
10:22 AM - Start task: "Diagnosis - electrical issue"
11:05 AM - End task: "Diagnosis" (43 minutes)
11:05 AM - Start task: "Material procurement - outlet replacement"
11:38 AM - End task: "Material procurement" (33 minutes - drove to supply house)
11:38 AM - Start task: "Installation - GFCI outlets"
12:25 PM - End task: "Installation" (47 minutes)
12:25 PM - Start task: "Testing/verification"
12:42 PM - End task: "Testing" (17 minutes)
12:42 PM - Start task: "Customer education/documentation"
12:55 PM - End task: "Customer education" (13 minutes)
12:55 PM - Clock out (drive back to shop)
1:18 PM - Arrive at shop

Total time: 3.3 hours
Breakdown:
- Drive time: 0.72 hrs (22% of total)
- Diagnosis: 0.72 hrs (22%)
- Material procurement: 0.55 hrs (17%)
- Installation: 0.78 hrs (24%)
- Testing: 0.28 hrs (8%)
- Customer education: 0.22 hrs (7%)

What you learn from detailed tracking:

1. Drive time impact: 22% of this service call was non-billable drive time. Over 500 service calls annually, that's 360 hours = $26,000+ in unrecovered cost.

Action: Zone-based pricing, service area radius limits, or drive time surcharge for distant calls.

2. Material procurement inefficiency: 33 minutes mid-job to get parts.

Action: Stock common service call components in trucks (GFCI outlets, breakers, wire nuts, basic materials). If you eliminate this on 40% of calls, you save 100+ hours = $7,500 annually.

3. Estimate accuracy: You quoted 3 hours, actual was 3.3 hours (10% over).

Action: Adjust estimates to include material procurement contingency, or tighten truck inventory management.

Implementation challenges and solutions:

Challenge 1: "My techs won't use apps"

Solution:

• Choose simple, intuitive app
• Train properly (invest 2 hours per tech)
• Tie to incentives (bonuses based on productivity metrics)
• Lead by example if you're still in field

Challenge 2: "It slows them down"

Solution:

• Clock in/out by task takes 5-10 seconds
• Total daily burden: 2-3 minutes
• Value gained: $5,000-15,000 annually per tech in improved efficiency

Challenge 3: "I don't have time to review all this data"

Solution:

• Weekly 15-minute review of variance reports
• Monthly 45-minute deep dive on trends
• Quarterly strategic analysis
• Your CPA or accounting specialist should be producing these reports automatically

For time tracking implementation: Contractor Time Tracking Systems

Step 4: Track Material Costs Accurately (Including Waste and Returns)

Most electrical contractors track materials like this:

• Buy materials for job: $850
• Code expense to job: $850
• Mark up to customer: $1,100 (30% markup)
• Think they made $250 on materials

What they're missing:

Material waste and overage:

• You bought $850 in materials
• Actual materials installed: $720
• Leftover/waste: $130
• Should this $130 be charged to the job or absorbed as overhead?

Return logistics:

• You return $85 in unused materials
• Credit hits the account 2 weeks later
• Your job costing system doesn't reflect the return
• Job shows $850 material cost when actual was $765

Small parts and consumables:

• Wire nuts, electrical tape, screws, anchors, labels
• Comes from "truck stock" not purchased specifically for job
• Cost is real but not allocated to job
• Margins appear higher than reality

Delivery and freight:

• $45 delivery charge for materials
• Gets coded to "delivery expense" not to job
• Customer isn't charged delivery fee
• Margin evaporates

Correct material cost tracking system:

Track these material categories separately:

Category 1: Direct Job Materials

• Materials purchased specifically for job
• Installed on job
• Full cost allocated to job
• Example: 200A panel, breakers, wire for specific circuit count

Category 2: Indirect Materials (Truck Stock)

• Consumables carried on truck
• Used across multiple jobs
• Allocated based on usage tracking or average consumption
• Example: Wire nuts, tape, basic fittings

Category 3: Material Waste/Overage

• Materials purchased for job but not installed
• Can be returned: Credit back to job when processed
• Cannot be returned: Allocate to job as direct cost or absorb as overhead (policy decision)

Category 4: Freight/Delivery

• Delivery charges for job materials
• Allocate to job as direct cost
• Should be included in customer pricing

Example - Panel Upgrade Material Tracking:

Purchase for job:

• 200A outdoor panel: $385
• 20 breakers (various sizes): $240
• #2 copper wire (75'): $180
• Conduit and fittings: $95
• Permits/fees: $185
• Delivery charge: $25
• Total purchased: $1,110

Actual installation:

• Panel: $385 (fully installed)
• Breakers: $240 (18 installed, 2 returned for $22 credit)
• Wire: $180 (used 68', 7' waste)
• Conduit: $95 (used $82, waste $13)
• Permits: $185
• Delivery: $25

From truck stock:

• Wire nuts/connectors: ~$8
• Electrical tape: ~$3
• Labels: ~$4
• Screws/anchors: ~$5
• Truck stock total: $20

Material cost reconciliation:

• Purchased: $1,110
• Less returns: -$22
• Plus truck stock: +$20
• True material cost: $1,108

Waste analysis:

• Wire waste: $16 (7' of $180 ÷ 75')
• Conduit waste: $13
• Total waste: $29 (2.6% of material costs)

This level of tracking reveals:

1. Your true material cost including waste
2. Whether your markup is sufficient
3. Where waste is occurring (training opportunity?)
4. Whether delivery fees should be passed through to customers

Most electrical contractors are under-pricing materials by 5-15% because they're not tracking waste, truck stock, and delivery fees properly.

For material cost management: Contractor Material Cost Tracking

Step 5: Build Job Costing Reports That Drive Business Decisions

Most electrical contractors get reports like this from their bookkeeper:

"Here's your profit and loss statement for last month. You made $18,500 profit. Any questions?"

What you actually need:

Report 1: Job Profitability Summary (by Job Type)

Des Moines Electrical - November 2024 Job Profitability

SERVICE CALLS (78 calls)
Average Revenue per Call: $645
Average Direct Cost: $285
Average Overhead Allocated: $195
Average Net Profit per Call: $165 (25.6% margin)
Total Service Revenue: $50,310
Total Service Profit: $12,870

Top Performing Service Types:
1. Panel upgrades: 38% net margin (12 calls)
2. Generator service: 35% net margin (8 calls)
3. Emergency after-hours: 42% net margin (15 calls)

Bottom Performing Service Types:
1. Lighting repairs: 8% net margin (18 calls)
2. Outlet/switch replacement: 12% net margin (25 calls)

RESIDENTIAL PROJECT WORK (5 projects)
Total Revenue: $43,200
Total Direct Cost: $24,300
Total Overhead: $9,720
Net Profit: $9,180 (21.3% margin)

Top Performing Projects:
1. Smith whole-house rewire: 32% net margin
2. Johnson basement finish: 28% net margin

Bottom Performing Projects:
1. Wilson landscape lighting: 4% net margin
2. Brown EV charger install: 11% net margin

COMMERCIAL PROJECT WORK (3 projects)
Total Revenue: $67,500
Total Direct Cost: $41,800
Total Overhead: $13,500
Net Profit: $12,200 (18.1% margin)

MONTHLY TOTALS
Total Revenue: $161,010
Total Direct Costs: $91,385
Total Overhead Allocated: $38,415
Net Profit: $31,210 (19.4% margin)

What this report tells you:

1. Service calls are more profitable than project work (25.6% vs. 21.3% vs. 18.1%)
   • Action: Consider expanding service team
2. Emergency after-hours service is most profitable (42% margin)
   • Action: Promote 24/7 availability, increase marketing for emergency service
3. Lighting repairs are barely profitable (8% margin)
   • Action: Increase minimum service charge, bundle with other work, or stop offering standalone lighting repairs
4. Landscape lighting projects lose money
   • Action: Increase pricing by 30%, improve estimating, or exit this service line

Your generic CPA has never produced a report like this because they don't understand your business model or which metrics drive profitability.

Report 2: Estimate Accuracy Analysis

November 2024 - Estimate vs. Actual Performance

JOBS UNDER BUDGET (Good)
Johnson Panel Upgrade
- Estimated hours: 7.0
- Actual hours: 6.2
- Variance: -0.8 hrs (11% under)
- Why: Tech efficiency, no complications
- Profit impact: +$60

Martin Outlet Addition
- Estimated: 4.5 hrs
- Actual: 3.8 hrs
- Variance: -0.7 hrs (16% under)
- Why: Accessible location, no drywall repair needed
- Profit impact: +$52

JOBS ON BUDGET (Target)
Brown Generator Service: 4.0 est / 4.1 actual
Davis Breaker Replacement: 2.5 est / 2.4 actual
Thompson Circuit Addition: 5.0 est / 5.2 actual

JOBS OVER BUDGET (Problem)
Wilson Landscape Lighting
- Estimated hours: 18.0
- Actual hours: 26.5
- Variance: +8.5 hrs (47% over)
- Why: Underground wiring hit sprinkler lines (4 hrs),
       redesign per customer request (2.5 hrs),
       wire burial deeper than expected (2 hrs)
- Profit impact: -$635 (lost money on job)

Peterson Basement Rewire
- Estimated: 12.0 hrs
- Actual: 15.8 hrs
- Variance: +3.8 hrs (32% over)
- Why: Knob-and-tube removal more extensive than assessed (2 hrs),
       customer requested additional outlets mid-job (1.8 hrs)
- Profit impact: -$285

Anderson Commercial Lighting Retrofit
- Estimated: 32.0 hrs
- Actual: 38.5 hrs
- Variance: +6.5 hrs (20% over)
- Why: Access equipment delays (3 hrs),
       fixture compatibility issues (2 hrs),
       coordination with other trades (1.5 hrs)
- Profit impact: -$485

SUMMARY
Total jobs: 23
Under budget: 8 (35%)
On budget (±10%): 9 (39%)
Over budget: 6 (26%)

Average variance: +2.1 hours per job
Cost impact: -$14,385 in lost margin

KEY INSIGHTS:
1. Landscape lighting estimates consistently run over (3 of 4 this year)
  → Need better assessment protocol or stop offering
 
2. Basement rewires in older homes run over 70% of the time
  → Add 4-hour contingency to estimates for pre-1960 homes
 
3. Commercial projects run over when coordination is required
  → Add 15% time buffer for multi-trade projects

What this report tells you:

1. You're losing $14,000+ monthly due to estimate inaccuracy
   • $168,000 annually
   • Action: Improve estimating process
2. Specific service lines are consistently problematic
   • Landscape lighting, older home rewires, multi-trade coordination
   • Action: Adjust estimates or pricing for these scenarios
3. Change orders aren't being captured
   • Peterson job had customer changes mid-job but no change order
   • Action: Implement change order process

Report 3: Customer Profitability Analysis

Top 10 Customers by Revenue (YTD)

1. Westside Property Management
  Revenue: $86,500 (18 projects)
  Avg. Margin: 32%
  Payment terms: Net 30, pays on time
  Rating: A+ (keep and grow)

2. Johnson Development LLC
  Revenue: $73,200 (12 projects)
  Avg. Margin: 18%
  Payment terms: Net 45, averages 52 days
  Rating: B (profitable but slow pay)

3. Anderson Commercial Real Estate
  Revenue: $68,400 (22 service calls + 5 projects)
  Avg. Margin: 12%
  Payment terms: Net 60, pays at 75+ days
  Issue: Consistently disputes invoices, nickel-and-dimes change orders
  Rating: C- (high volume but low margin, consider dropping)

4. Miller Properties
  Revenue: $52,800 (15 projects)
  Avg. Margin: 28%
  Payment terms: Net 30, pays at 32 days
  Rating: A (excellent customer)

...

PROBLEM CUSTOMERS (Consider Terminating)

Anderson Commercial Real Estate
- High volume but terrible margins (12%)
- Payment issues (45+ days beyond terms)
- Constant scope disputes
- Annual profit: $8,208
- Management time: 40+ hours disputing/collections
- True profit after management time: ~$5,200
- Recommendation: Increase prices 35% or terminate

Brown & Associates
- Moderate volume: $28,500
- Negative margin: -4% (yes, losing money)
- Why: Always wants "quick quotes," jobs run over estimate,
       doesn't approve change orders, disputes final invoices
- Lost $1,140 this year working for this customer
- Recommendation: Terminate immediately

What this report tells you:

1. Your highest revenue customer isn't your most profitable
   • Anderson CR: $68,400 revenue but only $8,208 profit (12%)
   • Miller Prop: $52,800 revenue but $14,784 profit (28%)
   • Action: Spend less time pursuing Anderson, more time with Miller
2. You're actually losing money on some customers
   • Brown & Associates: -4% margin
   • Action: Fire them
3. Payment terms affect cash flow but report doesn't show it
   • Need to combine profitability analysis with DSO (days sales outstanding)
   • Johnson Development profitable but 3-week payment delay creates cash flow drag

Report 4: Technician Productivity & Efficiency

November 2024 - Technician Performance

Tech A (Lead Tech, 8 years experience)
Billable hours: 142 (79% utilization)
Average job variance: -0.3 hrs (consistently under estimate)
Customer satisfaction: 4.8/5.0
Margin on jobs: 32% average
Callbacks: 0 this month

Performance: Excellent - highly efficient, quality work, no issues
Action: Consider for lead/supervisor role, mentor newer techs

Tech B (Journeyman, 4 years experience)
Billable hours: 136 (76% utilization)
Average job variance: +1.2 hrs (consistently over estimate)
Customer satisfaction: 4.4/5.0
Margin on jobs: 18% average
Callbacks: 2 this month

Performance: Needs improvement - running over estimate on 65% of jobs
Issues: Appears to be inefficient on troubleshooting, takes too long on
       diagnosis phase
Action: Pair with Tech A for 2 weeks, focus on diagnostic efficiency
       training, re-evaluate

Tech C (Apprentice, 1.5 years experience)
Billable hours: 98 (54% utilization)
Average job variance: +2.1 hrs (frequently over)
Customer satisfaction: 4.7/5.0
Margin on jobs: 14% average
Callbacks: 1 this month

Performance: Expected for apprentice level, but utilization is low
Issues: Spending too much time in shop (training? lack of work assignment?)
Action: Increase field time to 70% utilization, more hands-on training

SUMMARY
Fleet utilization: 70% (target: 75%)
Average variance: +1.0 hrs per job
Top performer: Tech A (consistently profitable, efficient)
Needs attention: Tech B (over-running estimates, reducing margins)

What this report tells you:

1. Tech B is costing you $8,000+ annually in overrun hours
   • Action: Training, monitoring, or performance plan
2. Tech C's low utilization is wasting capacity
   • 54% billable = 46% paying an apprentice to sit in shop
   • Action: Better scheduling/dispatch
3. Tech A should be cloned
   • 32% average margin
   • Action: Have Tech A train others, document his processes

Your generic CPA produces none of these reports because they're focused on tax returns, not management decisions.

For management reporting: Contractor Management Reports

The Service Call Pricing Problem: Why Most Electricians Under-Price by 30-50%

The "Market Rate" Myth That's Destroying Your Margins

Conversation I hear constantly:

Me: "Why do you charge $145/hour for service calls?"

Electrician: "That's the market rate in Des Moines. That's what everyone charges."

Me: "What's your actual cost per billable hour including overhead?"

Electrician: "Uh... I don't know, maybe $75?"

Me: "So you're making $70/hour margin?"

Electrician: "I guess? But I don't feel like I'm making money. I'm always broke."

Here's why:

What you think your costs are:

• Base wage: $35/hr
• Payroll burden: ~$15/hr
• Materials markup covers overhead
• Total cost: ~$50/hr
• Margin at $145/hr: $95/hr (66%!)

What your costs actually are (from our earlier calculation):

• Loaded labor: $74.51/hr
• Overhead allocation: $55/hr (higher for service calls due to drive time, dispatch, customer acquisition)
• Total cost: $129.51/hr
• Margin at $145/hr: $15.49/hr (11%)

And that's before accounting for:

• Warranty callbacks (2-5% of service calls)
• Uncollectible invoices (1-3% of revenue)
• Estimate errors (jobs running over)
• Drive time to/from job

Real margin is closer to 6-8%.

Which explains why you're always broke despite "charging market rates."

The problem: You're pricing based on what competitors charge, not what your costs require.

The solution: Price based on your true costs + desired margin.

True cost-based pricing calculation:

Target net margin: 25% (reasonable for service business)

Your true cost per billable hour: $129.51

Required revenue calculation:

• Revenue = Cost ÷ (1 - Target Margin)
• Revenue = $129.51 ÷ (1 - 0.25)
• Revenue = $129.51 ÷ 0.75
• Revenue = $172.68 per hour

You should be charging $173/hour, not $145/hour.

But the market won't support that, right?

Wrong.

Premium pricing strategies for Des Moines electrical contractors:

Strategy 1: Value-based pricing instead of hourly rates

Stop charging $145/hour. Start charging by the job.

Example - GFCI Outlet Replacement:

Hourly pricing:

• 1.5 hours × $145 = $217.50
• Plus materials: $35
• Plus material markup (30%): $10.50
• Total: $263

Flat-rate pricing:

• Diagnosis and recommendation: $79
• GFCI outlet replacement (per outlet): $185
• Additional outlet (if multiple): $145 each
• Total for single outlet: $264
• Total for three outlets: $554

Why flat-rate is better:

• Customer knows price upfront (no hourly rate anxiety)
• You capture full value if job goes quickly
• You don't lose if job takes longer than expected
• Feels more professional

And you can price based on value:

• GFCI outlets provide safety (value: preventing electrocution)
• Code compliance (value: avoiding fines, resale issues)
• Peace of mind (value: emotional benefit)

Customer isn't buying 1.5 hours of labor—they're buying safety, compliance, and peace of mind. That's worth more than $263.

Strategy 2: Tiered service offerings

Standard Service Call:

• $145/hour
• Next available appointment (2-3 days)
• Normal business hours
• 1-year warranty

Priority Service Call:

• $195/hour
• Same-day or next-day appointment
• Scheduling priority
• 2-year warranty

Emergency Service Call:

• $285/hour
• 2-4 hour response
• After-hours/weekends
• 3-year warranty
• Text updates during service

Most electricians offer only Standard, leaving money on the table from customers who value speed and convenience.

Strategy 3: Membership/Maintenance Plans

Residential Annual Electrical Safety Plan: $249/year

• Annual electrical safety inspection
• Priority scheduling (no waiting)
• 15% discount on all service work
• No diagnostic/trip fees
• 24/7 emergency service access

Why this works:

• Recurring revenue (predictable cash flow)
• Higher customer lifetime value
• Reduced marketing cost (retained customers)
• Fills schedule gaps with inspection work

Example: 150 members × $249 = $37,350 annual recurring revenue

Plus: These customers spend average $680/year on additional service work

• 150 members × $680 × 15% margin increase = $102,000 additional revenue
• Less 15% member discount = $87,000 net additional revenue

Total value of membership program: $124,350 annually

This is found money that exists because you structured pricing strategically instead of just charging hourly rates.

For service pricing strategies: Electrical Contractor Service Pricing

The Change Order Failure That Costs $20,000+ Annually

Scenario that happens 30+ times per year:

You're doing a panel upgrade. Customer says: "While you're here, can you add two outlets in the garage and move that light switch?"

What most electricians say: "Sure, no problem."

What you should say: "Absolutely, let me write up a change order for the additional work. The two garage outlets will be $285, and moving the switch will be $165. That's $450 total. I'll need your signature to proceed with the additions."

What actually happens:

• You say "sure" and do the work
• You forget to document it
• You complete the job and invoice original amount
• Customer disputes any additional charges
• You lose $450

Multiply by 30 instances per year: You're leaving $13,500 on the table.

Why electricians don't do change orders:

Excuse 1: "It's awkward to stop and write up paperwork"

Reality: It's more awkward to dispute payment after the fact. And a simple tablet/phone app makes change orders take 60 seconds.

Excuse 2: "It's only a small addition, not worth the paperwork"

Reality: 30 "small additions" = $13,500. That's worth the paperwork.

Excuse 3: "I don't want to upset the customer"

Reality: Customers expect to pay for additional work. What upsets them is surprise charges after the fact. Change orders prevent disputes.

Proper change order process:

Step 1: Identify scope change

‍Customer: "Can you add those outlets?"

You: "Sure, I can do that. Let me price it for you."

Step 2: Price immediately (have standard pricing for common additions)

• Outlet addition: $145 per location
• Switch relocation: $165
• Additional circuit: $385
• Etc.

Step 3: Document on tablet/phone

• Use field service software or simple app
• Fill in: Description, price, customer signature
• Takes 60-90 seconds
• Email copy to customer immediately

Step 4: Execute work

• Proceed with addition
• Track time separately (for job costing)

Step 5: Invoice correctly

• Original work: $2,850
• Change order - outlets: $290
• Change order - switch move: $165
• Total: $3,305

Result: You get paid for all work performed, customer isn't surprised, no disputes.

Annual impact: $13,500 in recovered revenue from change orders you're currently eating.

For change order management: Contractor Change Order Best Practices

Common Job Costing Mistakes Des Moines Electricians Make

Mistake #1: Allocating Overhead Equally to All Jobs

The problem: Charging every job the same overhead rate regardless of actual overhead consumed.

Example:

Your blended overhead rate is $42/hour.

Job A - Residential Service Call (3 hours):

• Overhead allocated: 3 hrs × $42 = $126

Job B - Commercial Project (40 hours):

• Overhead allocated: 40 hrs × $42 = $1,680

Why this is wrong:

Actual overhead consumed by Job A:

• Vehicle/drive time: $55 (1 hour drive time roundtrip)
• Marketing (customer acquisition): $75 (new customer)
• Dispatch/scheduling: $18
• Invoice processing: $12
• Insurance: $15
• Licensing: $5
• Total actual overhead: $180

You're under-allocating by $54 ($180 actual vs. $126 allocated)

Actual overhead consumed by Job B:

• Vehicle: $80 (minimal drive time, spread over 40 hours)
• Marketing: $40 (existing repeat customer)
• Project management: $200
• Insurance: $65
• Licensing: $12
• Total actual overhead: $397

You're over-allocating by $1,283 ($1,680 allocated vs. $397 actual)

Result: Service calls appear more profitable than they are, projects appear less profitable than they are.

The fix: Use activity-based costing with different overhead rates for service vs. project work.

For overhead allocation: Construction Overhead Allocation

Mistake #2: Not Tracking Warranty/Callback Costs

Scenario: You install 12 recessed lights in a kitchen. Two weeks later, customer calls—one light is flickering. You send a tech back to diagnose and fix (loose connection). Takes 1.5 hours.

Question: What does this callback cost you?

Most electricians: "I don't know, I don't track callbacks separately."

Actual cost:

• Labor (1.5 hrs × $74.51 loaded cost): $111.77
• Drive time/vehicle: $35
• Administrative (scheduling, dispatch): $15
• Total callback cost: $161.77

Over a year, if you have 25 callbacks averaging $160 each, that's $4,000 in untracked costs.

Why this matters:

For job costing: The original recessed lighting job looks like it made 28% profit. But if 15% of these jobs require callbacks, your true profit is 23%.

For pricing: If you knew callbacks cost you $4,000 annually, you'd either (a) increase prices to cover it, or (b) improve installation quality to reduce callbacks.

For quality control: Tracking callbacks by tech reveals which techs have quality issues requiring training.

Callback tracking system:

In your job costing software:

• Create "callback" job type
• Link callbacks to original job
• Track:
  • Original job #
  • Callback reason
  • Time spent
  • Tech responsible
  • Resolution

Monthly report:

November 2024 Callbacks

Total callbacks: 7
Total cost: $1,127
Callback rate: 3.2% of jobs

By Tech:
- Tech A: 1 callback (1.4% of his jobs)
- Tech B: 5 callbacks (6.8% of his jobs)
- Tech C: 1 callback (2.9% of his jobs)

By Reason:
- Loose connections: 3 (training issue?)
- Incorrect diagnosis: 2 (Tech B, both times)
- Customer education needed: 2 (not tech fault)

Action items:
- Tech B needs retraining on diagnostic procedures
- Standard practice should include checking all connections twice
- Consider brief customer education summary sheet at job completion

This data drives improvement that saves $2,000-4,000 annually in callback costs.

For quality control and callbacks: Contractor Quality Control Systems

Mistake #3: Not Measuring Equipment/Tool Efficiency

You own $180,000 in tools, equipment, and vehicles.

Question: Are they generating adequate return?

Most electricians: "What do you mean? They're tools, they're necessary."

Correct mindset: These are income-generating assets. They should produce positive ROI.

Example - Service Truck Analysis:

Truck specs:

• Purchase price: $65,000
• Annual operating costs: $12,000 (fuel, insurance, maintenance)
• Useful life: 6 years
• Annual depreciation: $10,833

Total annual cost of this truck: $22,833

Question: How much revenue does this truck generate?

Most electricians don't know.

Proper analysis:

Truck #1 (Tech A's truck):

• Jobs completed from this truck: 285 jobs
• Total revenue: $187,500
• Revenue per dollar of truck cost: $187,500 ÷ $22,833 = 8.2x

Truck #2 (Tech B's truck):

• Jobs completed: 186 jobs
• Total revenue: $118,400
• Revenue per dollar of truck cost: $118,400 ÷ $22,833 = 5.2x

What this reveals:

Tech A's truck generates 58% more revenue per dollar of truck cost than Tech B's truck.

Why?

• Tech A is more productive (better scheduling, less downtime)
• OR Tech A handles higher-value service calls
• OR Tech B has too much non-billable time

Action: Investigate why utilization differs, improve Tech B's productivity or reassign work.

Same analysis for equipment:

Thermal imaging camera ($6,500):

• Used on 45 diagnostic jobs
• Average additional revenue per use: $125 (enables identifying issues you'd otherwise miss)
• Annual revenue contribution: $5,625
• ROI: 86% annually (pays for itself in 1.2 years)
• Verdict: Excellent investment, consider buying second camera

Fish tape set ($280):

• Used on every wire-pulling job: 65 uses
• Time savings per use: 0.3 hours
• Value of time saved: 65 × 0.3 × $145/hr = $2,828
• ROI: 1,009% annually
• Verdict: Buy these for every truck

Specialty conduit bender ($850):

• Used on 4 jobs annually
• Can't quantify time savings
• Revenue from these jobs: $18,500 (but would have gotten jobs anyway with standard bender)
• Verdict: Questionable investment, consider renting instead

This analysis helps you:

• Prioritize equipment investments
• Eliminate low-ROI tools
• Justify specialty equipment purchases
• Optimize fleet sizing

For equipment ROI analysis: Contractor Equipment Investment Analysis

Mistake #4: Ignoring the Cost of Capital (Financing/Credit Terms)

Many electrical contractors:

• Carry significant equipment financing
• Offer Net 30 terms to commercial customers
• Don't factor financing costs into job profitability

Example:

Commercial project: $45,000Net margin (before financing costs): 22% = $9,900

But:

• Customer pays Net 60 (actually pays at 72 days)
• You financed equipment purchases for this job: $18,000 at 8% interest
• You're paying interest for 72 days waiting for customer payment

Financing cost calculation:

• Equipment financed: $18,000
• Interest rate: 8% annually
• Days outstanding: 72
• Interest cost: $18,000 × 0.08 × (72 ÷ 365) = $284

Plus opportunity cost:

• You can't use that $45,000 for other jobs while waiting for payment
• If your money earns 10% elsewhere, opportunity cost = $45,000 × 0.10 × (72 ÷ 365) = $888

Total capital cost: $284 + $888 = $1,172

True profit: $9,900 - $1,172 = $8,728 (19.4% margin, not 22%)

Over a year, if you have $500K in revenue with average 60-day payment terms and 20% margin:

• Nominal profit: $100,000
• Capital costs (financing + opportunity cost): ~$8,000
• True profit: $92,000

You're giving away 8% of your profit to financing and slow-paying customers.

Solutions:

Solution 1: Early payment discounts

• Offer 2% discount for payment within 10 days
• Many customers will take it
• You recover capital 50+ days earlier
• 2% discount costs $900 on $45K job
• But you save $1,172 in capital costs
• Net benefit: $272

Solution 2: Progress payments

• On large projects, require deposits and progress payments
• Don't finance entire project yourself
• Customer carries some capital burden

Solution 3: Price in your capital costs

• If customer wants Net 60, add 2-3% to price to cover capital costs
• If they want Net 30, standard pricing
• If they pay at job completion, offer 2% discount

For cash flow and payment terms: Contractor Payment Terms Optimization

Implementing Job Costing in Your Electrical Business: 90-Day Action Plan

Month 1: Foundation and Data Collection

Week 1: Calculate true labor costs

• Determine loaded labor cost per hour for each tech level
• Factor in payroll taxes, workers comp, benefits
• Calculate billable efficiency percentage
• Document true cost per billable hour

Week 2: Map overhead costs

• List all annual overhead expenses
• Categorize into cost pools (facility, vehicle, tools, admin, marketing, insurance)
• Calculate allocation rates for each pool
• Determine different rates for service vs. project work

Week 3: Implement time tracking

• Select mobile time tracking app
• Train all techs on usage
• Set up tasks/categories for tracking
• Begin capturing data (don't try to analyze yet, just collect)

Week 4: Set up job costing structure

• Configure accounting software for job costing
• Create job types/categories
• Establish chart of accounts for proper cost allocation
• Run initial reports (will be incomplete but establishes baseline)

Month 2: Refinement and Analysis

Week 5-6: Material tracking improvement

• Implement system for tracking material waste
• Process returns promptly and credit back to jobs
• Track truck stock usage
• Include freight/delivery in job costs

Week 7-8: Build initial reports

• Job profitability by type
• Estimate accuracy analysis
• Tech productivity comparison
• Customer profitability assessment

Month-end: Review first month of job costing data

• Identify gaps in data collection
• Refine allocation methods
• Adjust tracking processes based on lessons learned

Month 3: Optimization and Decision-Making

Week 9-10: Pricing analysis

• Compare current pricing to true costs + desired margin
• Identify underpriced services
• Develop new pricing structure
• Plan pricing rollout strategy

Week 11-12: Strategic decisions

• Identify unprofitable job types → eliminate or re-price
• Identify most profitable work → market more aggressively
• Evaluate problem customers → address or terminate
• Assess tech performance → training or personnel decisions

End of Month 3: Full job costing system operational

• Weekly reports being reviewed
• Pricing adjusted based on true costs
• Strategic decisions being made from data
• Continuous improvement process established

Expected Results After 90 Days

Revenue optimization: $15,000-35,000 annually

• Better pricing on underpriced services
• Elimination of money-losing work
• Improved change order capture

Cost reduction: $10,000-25,000 annually

• Reduced material waste
• Improved tech productivity
• Lower callback rates

Cash flow improvement: $20,000-40,000

• Better payment term management
• Faster collection on profitable customers
• Reduced capital costs

Total annual impact: $45,000-100,000

ROI on implementation effort: 10x to 20x

For implementation support: Job Costing Implementation Services

Why Your Generic CPA Can't Help With Job Costing

Here's what your generic CPA knows:

• How to record revenue and expenses
• Basic QuickBooks job tracking
• Tax return preparation
• Financial statement generation

Here's what your generic CPA doesn't know:

• How to calculate true loaded labor costs for electrical contractors
• Activity-based costing for service vs. project work
• Overhead allocation strategies by job type
• How to build management reports that drive decisions
• What metrics matter for electrical contractor profitability
• How to analyze estimate accuracy and tech productivity
• How service call pricing should differ from project pricing

The difference this makes:

Generic CPA: Gives you P&L showing $85,000 profit. "Nice job this year."

Electrical contractor specialist: "You made $85,000, but here's what the data shows:

• Service calls generated 62% of profit on only 40% of revenue
• Your panel upgrades are 22% more profitable than you thought
• Your generator installations lose money on 40% of jobs
• Tech B's inefficiency cost you $14,000 this year
• Three customers account for 80% of your payment delays
• If you eliminate landscape lighting and focus on your profitable services, you'll increase profit by $35,000 next year"

One CPA tells you what happened. The other tells you what to do about it.

This isn't about firm size or hourly rates—it's about industry-specific expertise that comes from working exclusively with construction and electrical contractors.

A CPA who understands electrical contracting knows that job costing isn't optional accounting complexity—it's the difference between profitable growth and working harder to make the same (or less) money.

Take Control of Your Electrical Business: Next Steps for Des Moines Electricians

If you're an electrical contractor in Des Moines, Ankeny, West Des Moines, Johnston, Grimes, Clive, Waukee, or surrounding areas and you recognize these job costing blind spots in your business, here's what to do:

Option 1: Implement Job Costing Yourself

This article provides the complete framework:

• True loaded labor cost calculation
• Overhead allocation by cost pool
• Time tracking by task implementation
• Management report templates
• 90-day implementation plan

You can build this system internally if you:

• Have time to dedicate to setup (20-30 hours initially)
• Have accounting software that supports job costing
• Are comfortable with financial analysis
• Can train your team on new processes

Many electrical contractors successfully implement job costing themselves—it just requires commitment and follow-through.

Option 2: Get Electrical Contractor Accounting Expertise

If your current CPA doesn't provide job costing and management reporting, you're flying blind.

Performance Financial LLC specializes in construction and electrical contractor accounting. We work exclusively with contractors throughout Iowa and the Midwest.

We provide:

• Complete job costing system setup and implementation
• Monthly management reports showing true profitability by job type
• Estimate accuracy analysis and tech productivity metrics
• Customer profitability assessment
• Strategic pricing recommendations based on your true costs
• Integration of job costing with tax planning and cash flow management

We understand how electrical contractors actually operate because we work with them every day. We know:

• The difference between service calls and project work
• How to allocate overhead to different work types
• What drives profitability in the electrical trades
• Which metrics matter for your business decisions

Option 3: Start with Tax Reduction Analysis

Maybe you're not ready to implement full job costing. That's fine. But you should at least understand what you're missing.

Performance Financial offers a Tax Reduction Analysis that includes:

• Review of your current financial reporting
• Assessment of whether you have adequate job costing
• Identification of blind spots in your profitability analysis
• Calculation of potential value from implementing proper job costing
• Specific recommendations for your electrical business

There's no cost for this analysis. It's a consultation to help Des Moines electrical contractors understand whether they're making data-driven decisions or operating on gut feel.

Schedule your Tax Reduction Analysis: Book Consultation

Final Thoughts: Job Costing as Competitive Advantage

Two Des Moines electrical contractors. Similar size. Similar work mix. Similar market.

Contractor A (no real job costing):

• Knows total revenue and expenses
• Thinks all work is "pretty profitable"
• Prices based on market rates
• Loses money on 30% of jobs without realizing it
• Struggles to grow because taking on more work doesn't increase profit proportionally

Contractor B (implements job costing):

• Knows exactly which services are most profitable
• Eliminates money-losing work
• Prices based on true costs + desired margin
• Makes informed decisions about hiring, equipment, marketing
• Grows profitably because adding capacity in profitable services directly increases profit

Five years later:

• Contractor A: $1.8M revenue, 9% net margin, $162,000 profit, stressed and overworked
• Contractor B: $2.4M revenue, 18% net margin, $432,000 profit, confident and strategic

The difference: Contractor B knew which work to pursue, which customers to keep, what to charge, and where to invest. Contractor A was guessing.

Job costing isn't just accounting—it's competitive intelligence about your own business. It's the difference between hoping you're profitable and knowing you're profitable.

The electrical contractors who master job costing (or partner with specialists who do) have a massive advantage. They make better pricing decisions, avoid unprofitable work, optimize their team, and grow strategically instead of frantically.

You can be Contractor B. The frameworks in this article work. The implementation plan is clear. The ROI is 10-20x.

The only question is whether you'll implement it—or whether you'll keep flying blind and hoping for the best.

Des Moines electrical contractors who want to stop guessing and start knowing have everything they need right here.

The question is whether you'll use it.

About Performance Financial LLC

Performance Financial is a Des Moines-based CPA and accounting firm specializing in construction contractors, builders, and electrical trades throughout Iowa and the Midwest. Unlike generic CPAs who provide basic bookkeeping and tax compliance, we provide construction-specific management accounting including job costing, profitability analysis, pricing strategy, and data-driven business advisory.

We work with electrical contractors, HVAC contractors, plumbers, general contractors, and other construction trades across the Des Moines metro including Ankeny, West Des Moines, Johnston, Grimes, Clive, Waukee, and Pella.

Services: Electrical Contractor Accounting

Contact: Schedule Consultation

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Ready to stop guessing and start knowing which jobs actually make you money? Schedule your Tax Reduction Analysis with Performance Financial today. No cost, no obligation—just a conversation about whether you're making decisions based on data or hope.

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