Job Profitability Analysis
The prompt
Analyze profitability of a completed job. Estimate price: {{amount}}. Actual cost: {{labor_hours_x_rate_materials_equipment}}. Job type: {{service_type}}. Output: Actual profit margin %. Variance vs estimate: {{and}}. Was job profitable? If not: what drove the variance? Coaching point for future estimates. Why this works
Comparing actual margin to estimated margin for completed jobs creates a feedback loop between estimating and operations that is essential for improving estimate accuracy over time. The variance decomposition — was it labour hours, labour rate, materials cost, or scope change? — identifies which component of the estimate needs correction for future jobs. The coaching point output converts the analysis from a performance review into a learning tool.
Risks & review
Job profitability analysis is only as useful as the timekeeping and materials tracking behind it — businesses that estimate labour in hours but track actual hours loosely will produce variance analyses that reflect record-keeping gaps, not actual cost overruns. Invest in field timesheet discipline before using job profitability analysis as a management tool, as the analysis cannot be more accurate than the underlying data.