Mud and Screws Are Using Up Your Overhead
Joint compound, tape, screws, corner bead, blades, caulk, and plastic come off a revolving supply house account on one monthly statement with no job written on any line.
Most trades buy material by the job, where one delivery and one PO match one number in job cost. Interiors has a daily drip of consumables plus a stocking operation that moves tons of board vertically before production even starts, and neither one looks like a job purchase when the paperwork comes in. The stocking hours in particular disappear into field wages with no installed quantity to measure them against.
The size of it
Two to four percent of contract value moves out of job cost and into overhead. Every job reads slightly better than it should while overhead reads bloated, so you cut the wrong line and then bid the next job off unit costs missing their real consumable and stocking load.
The foreman buys off the truck at the local supplier all week, picking up compound, tape, screws, corner bead, blades, sanding media, caulk, masking, plastic sheeting, and drop cloths. One statement comes in at month end with no job reference on the line items, so the whole thing posts to overhead. Separately, board gets boom-trucked into the building and hauled to the floors before a single sheet is installed, which is real labor and real rental spent ahead of any billable installed quantity. Both costs are incurred before the first pay application on that area.
Three moves, in order
Step 05: Software and bookkeeping alignment
Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current.
What else costs interiors contractors money
The same mechanism in other trades
What interiors owners ask
Supply house account charges never get assigned to a job?
Joint compound, tape, screws, corner bead, blades, caulk, and plastic come off a revolving supply house account on one monthly statement with no job written on any line.
What does it cost?
Two to four percent of contract value moves out of job cost and into overhead. Every job reads slightly better than it should while overhead reads bloated, so you cut the wrong line and then bid the next job off unit costs missing their real consumable and stocking load.
What do I do first?
Make the supply house require a job number at the counter and on the truck, and have them print it on every line of the monthly statement.
What are interiors contractors supposed to be making?
Interiors has 19% gross margin, 13% overhead and 6% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 1 point below it. The CFOS target is 10%.
Which part of the system fixes it?
The step is number 05, software and bookkeeping alignment. Live job costs inside thirty seconds, with the bookkeeping cadence that keeps them current. It comes from chapter 5 of CONTROL: C.F.O.S. Construction Financial Operating System.
Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for interiors contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.