Margin tracking

Margin should move when the forecast moves.

A project margin based on the original budget is not meaningful once procurement, variations and cost overruns have changed the expected final cost.

What changes forecast margin

Revenue

Contract and variations

Current contract value should reflect approved commercial changes without treating unapproved claims as guaranteed revenue.

Cost

Forecast final cost

Expected final cost needs to include known remaining exposure, not just invoices already received.

Result

Forecast margin

Current expected revenue less current expected final project cost.

Margin erosion is usually a collection of small problems

Residential jobs rarely lose margin in one theatrical event. It is more often quote gaps, scope exclusions, material movements, unrecovered client changes and allowances that were never updated.

  • Trade package overruns
  • Unrecovered or underpriced variations
  • Material quantity or rate increases
  • Uncommitted scope sitting outside current allowances
  • Rework and site-condition costs
  • Savings assumed before they are actually secured

Report the action, not just the percentage

Quantify

Show the dollar and percentage movement in expected margin.

Explain

Identify the categories and events driving the movement.

Correct

Record actions that may recover revenue, reduce cost or contain further loss.

Related workflow

See how BuilderForecast reports the position

The application produces project financial summaries with budget, forecast and commercial commentary in the same reporting workflow.

Related resources