Why Every Roofing Contractor Needs Job Costing (And How It Can Double Your Profits)

Megan Foster
Jul 4
4 min read

Here's a scenario that might sound familiar: You just finished a big residential re-roof project. The homeowner is thrilled, you got paid in full, and your crew did excellent work. But when you look at your bank account a few weeks later, you're wondering where all that money went.

Sound familiar?

If you're a roofing contractor who's ever wondered whether you actually made money on a job—or worse, discovered you lost money on what seemed like a profitable project—you're not alone. The difference between successful roofing businesses and those that struggle often comes down to one critical factor: job costing.

What Is Job Costing (And Why Most Roofers Skip It)

Job costing is the process of tracking every expense associated with a specific roofing project—from materials and labor to equipment rental and permit fees—then comparing those costs to what you charged the customer.

Most roofing contractors skip this step because:

They think it's too complicated or time-consuming
They assume if they're busy, they must be profitable
They focus on cash flow rather than actual profit per job
They don't have systems in place to track job-specific expenses

But here's the reality: Without job costing, you're essentially flying blind. You might be working harder, not smarter.

The Hidden Profit Killers in Roofing Jobs

When you don't track costs per job, these profit killers can devastate your bottom line:

Material Cost Creep

Underestimating waste and overage
Price fluctuations between estimate and installation
Emergency material runs at retail prices
Theft or damage to materials on-site

Labor Overruns

Jobs taking longer than estimated
Overtime costs from weather delays
Crew inefficiencies on difficult projects
Subcontractor cost overruns

Hidden Expenses

Dump fees and disposal costs
Equipment rental extensions
Permit and inspection fees
Travel time and fuel costs

Change Orders Gone Wrong

Scope creep without proper documentation
Additional work performed without approved pricing
Customer disputes over "extras"

Without job costing, you won't know which of these issues are eating your profits until it's too late.

How Job Costing Transforms Your Roofing Business

When you implement proper job costing, you gain powerful insights that can dramatically improve your profitability:

Accurate Bidding

Know your true costs for different types of projects
Build realistic estimates based on historical data
Price jobs to ensure consistent profit margins
Avoid the trap of winning bids by being the cheapest

Crew Performance Insights

Identify which crews are most efficient on different job types
Spot training opportunities to improve productivity
Reward high-performing teams appropriately
Make informed decisions about crew composition

Material Management

Track waste patterns to improve ordering accuracy
Identify preferred suppliers based on total job cost (not just material price)
Negotiate better pricing with data to back up your volume
Reduce theft and loss through better tracking

Project Type Profitability

Discover which types of roofing jobs are most profitable
Focus your marketing on high-margin work
Avoid or re-price consistently unprofitable job types
Develop expertise in your most lucrative niches

The Job Costing Categories Every Roofer Should Track

To get actionable insights, track these categories for every job:

Direct Materials

Shingles, underlayment, flashing
Nails, screws, sealants
Waste and overage (track separately)
Delivery fees

Direct Labor

Crew wages (including benefits)
Overtime premiums
Subcontractor payments
Travel time to job site

Equipment & Tools

Equipment rental costs
Fuel for company vehicles
Tool replacement and maintenance
Safety equipment

Job-Specific Overhead

Permits and inspections
Dumpster rental and disposal
Insurance adjustments
Customer service time

Indirect Costs

Estimating time
Project management
Administrative processing
Warranty service calls

Common Job Costing Mistakes to Avoid

Mistake #1: Only Tracking Materials Labor often represents 40-50% of your job costs. If you're not tracking labor hours per job, you're missing half the picture.

Mistake #2: Forgetting Indirect Costs The time you spend estimating, managing, and following up on jobs is real cost that should be factored into profitability.

Mistake #3: Not Tracking in Real-Time Waiting until the job is complete to tally costs means you can't make adjustments to protect your margins.

Mistake #4: Ignoring Small Expenses Those $20 trips to the supply house add up. Track everything.

Getting Started with Job Costing

Implementing job costing doesn't have to be overwhelming. Start with these steps:

Choose Your System: Use construction-specific software or work with a bookkeeper who understands job costing
Train Your Team: Make sure everyone understands the importance of tracking time and materials accurately
Start Simple: Begin with your most common job types
Review Monthly: Analyze completed jobs to identify trends and opportunities
Adjust Pricing: Use your data to refine estimates and pricing strategies

The Bottom Line: Knowledge Is Profit

In the roofing industry, the difference between a good year and a great year often comes down to knowing your numbers. Job costing gives you the knowledge to:

Price jobs profitably from the start
Identify and eliminate profit leaks
Focus on your most lucrative work
Make data-driven business decisions
Build a sustainable, profitable business

Don't let another profitable-looking job turn into a hidden loss.

At Balanced Financial Consulting, we help roofing contractors implement job costing systems that provide clear insights into project profitability. Our team understands the unique challenges of the roofing industry and can help you track the metrics that matter most. Contact us at 509-255-3577 or Info@balancedfinancialconsulting.com to learn how proper job costing can transform your bottom line.