Job costing or bust: the bid → build → measure → adjust loop

If you do any kind of commercial work, job costing isn’t “nice to have.” It’s the link between what you bid and what actually happens in the field. In episode two of The Cost Codes Show, construction profitability expert, Steve Coughran, spells out a simple operating rhythm—bid → build → measure → adjust, and explains why skipping the “measure” step leaves you guessing.

Below is a practical guide you can hand to your team.

Why job costing matters

Job costing is how you compare budgets to actuals while work is in progress, learn where production rates are off, and feed those lessons back into estimating. Without it, the office and field argue about whether budgets are realistic; with it, you can point to data, not opinions, and fix the right thing. The episode gives concrete examples—catching chronic underbids on materials and correcting unrealistic production rates—which only surface if you review job-cost reports and adjust.

The loop, step by step

1) Bid

Build your estimate and budget by phase, with clear assumptions for labor, materials, and subs. Treat the budget as the playbook you’ll measure against later.

2) Build

Execute to the plan and capture costs in real time. If the field changes the plan, record it. “We’ll true it up later” is how variances hide.

3) Measure

Run your job-cost report regularly (weekly on active jobs, minimum monthly). Look for patterns: labor hours drifting, materials consistently short, subs exceeding buyout. This is the “measure” step most firms skip, and it’s why they keep repeating the same estimating mistakes.

4) Adjust

Use what you learned to correct production rates, assemblies, and markups in your estimating database. This turns job costing into better bids, not just postmortems. The episode calls out exactly this loop as the cure for the office-vs-field stalemate.

What “good” looks like

• Production rates get trued up when job-cost reviews show a consistent gap (e.g., you thought it was 100 sq ft/hr; reality is 60).
• Estimators know the floor when a GC asks for a giveback, because job-level margins are visible and current. If you can’t show exactly how far you can move without dipping below required margins, you’re negotiating blind.

Setup checklist for subcontractors

1. Standardize budgets by phase and cost code so every job has the same structure.
2. Track actuals in real time (labor, materials, subs) so your reports aren’t two weeks stale.
3. Review weekly on active jobs; monthly at minimum. Bring both office and field leaders.
4. Close the loop by updating estimating assemblies and markups based on measured reality. That’s how you stop repeating misses the next time you bid.

Where Knowify fits

• Budgets and actuals in one place: Connect preconstruction (proposals and budgets) to delivery (job costing and progress billing) with real-time profitability tracking at the job level.
• Automated job costing: Once you start working, Knowify will automatically log costs like POs, time-worked, equipment usage, and subcontracts to the appropriate job and job phase in real-time. This keeps your cost tracking accurate without any spreadsheets or manual work required by you.

When the market tightens, the contractors who keep this loop tight don’t guess. Instead, they adjust, then win the next bid with better numbers. Start with one active job this week and run the full cycle.

See labor, materials, subs for every job on a single screen in Knowify. Get started today with a 14-day free trial.