RHACOVA

Job costing and profitability

How to Close Out a Job and Measure the Final Result

A job is not finished when the crew leaves. It is finished when every cost has landed and the final revenue is known.

The short answer

A job is closed when every dollar of revenue has been invoiced and every cost has landed — including the late supplier invoice, the final payroll and the disposal ticket. Only then is the profit a fact. Closing out means recording that fact, the variance by cost class and the stated reason for each variance, so the next estimate can be better than a guess.

Definitions

Closeout
The point at which a job's revenue and cost are both final and the result stops being a projection.
Final revenue
Contract value plus approved change orders, as actually invoiced. Not the original estimate.
Variance reason
A stated cause for a difference between estimate and actual. Recorded by a person; never inferred from the numbers.

What must be true before you close

  • All change orders approved, priced and invoiced.
  • All subcontractor invoices received — commitments converted to actuals.
  • Final payroll posted, including punch-list and callback hours.
  • Material returns credited and rental returns confirmed.
  • Disposal, permits and delivery charges recorded against the job.
  • Retainage, if any, either invoiced or explicitly marked outstanding.

Anything still open means the profit figure is still a forecast — see committed costs and cost-to-complete.

The formulas

Final profit = final revenue − final cost

Cost variance = actual cost − estimated cost

Profit variance = final profit − expected profit

Worked example: a job closed out

  • Estimated cost: $30,000.00
  • Actual cost: $32,300.00
  • Cost variance: $2,300.00 (7.67%)
  • Expected profit at the estimate: $10,000.00
  • Final profit: $9,200.00
  • Profit variance: -$800.00
  • Final margin: 22.17%

Both the cost overrun and the extra invoiced revenue are visible. Netting them into a single “it came out fine” loses the two facts that matter: the estimate was low, and change orders covered for it. Only one of those repeats reliably.

Record the reason, do not deduce it

Numbers show that labor ran over; they never show why. Weather, a late material delivery, an access restriction, an underestimated quantity and a crew still learning the work all look identical in a variance column. In RHACOVA, a person records the stated reason in the job's “Why is this changing?” section, whenever the cause is known, and the reason stays attached to the job; software never invents one, because an invented cause would corrupt every future estimate that learns from it. Recording a reason does not close the job. Formal closeout is a separate step: an owner or admin reviews the final result, confirms it explicitly and RHACOVA freezes a snapshot of it. See estimate vs actual profit leaks.

Common mistakes

  • Closing the job when the last crew day ends rather than when the last invoice lands.
  • Leaving punch-list and callback hours off the job that caused them.
  • Comparing actual cost to the revised budget instead of the frozen baseline.
  • Recording a variance with no stated reason, which makes it useless later.

Quick answers

When is job profit final?
When all revenue is invoiced and every cost — including subcontractor invoices, retainage and warranty work already known — has arrived. Before that, profit is a projection.
What should closeout record for next time?
The variance by cost class, the reasons someone actually stated, and the final margin. Guessed reasons are worse than no reason at all.

Run the numbers

Cost variance in dollars and percent, expected profit and margin, and final profit, profit variance and margin difference once a final revenue is known.

Open the Estimate vs Actual Calculator

Free, no account, and the answer stays on the page.

Close the loop on the estimate

Closing a RHACOVA Job compares the final result to the frozen baseline and feeds the pattern back into what your next estimate starts from.

Open Jobs

How RHACOVA defines these terms

Every calculator, estimate and job in RHACOVA uses one set of financial definitions, and they are written down rather than implied. Read the RHACOVA methodology for the full list of definitions this article relies on.

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