Material that disappears between the yard and the job
Tie every purchase to a PO and a job, then count leftovers.
Rebar, conduit, pipe, and fittings get bought for a job, loaded in the yard, and some of it ends up on another job or in somebody's truck. By the time the job closes, the material line is over budget and no one can say why. You paid the supplier for all of it, and you can't bill the GC for any of the part that vanished. Small losses on each job add up to a real number across a year.
Three moves, in order
What CFOS does about it
In CFOS you email a supplier bill to your bills inbox and it's read, coded to a job, and checked against the PO. A bill with no matching PO gets flagged before it's paid. The dailies list the crew and the equipment, and the job cost by cost code updates every hour against the budget, so a material line going over is visible while the job is still open. QuickBooks keeps the books, and CFOS reads the bills and POs from it.
Who owns this: Office manager.
At $6M, with a few supply houses and a yard, a PO on every purchase takes about an hour a day. That costs less than a month of lost fittings. It also tells you where to look.
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Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone following up on them.
Other problems step 06 solves
Other things that go wrong
What owners ask
Material waste tracking construction jobs?
Tie every purchase to a PO and a job, then count leftovers. Rebar, conduit, pipe, and fittings get bought for a job, loaded in the yard, and some of it ends up on another job or in somebody's truck. By the time the job closes, the material line is over budget and no one can say why. You paid the supplier for all of it, and you can't bill the GC for any of the part that vanished. Small losses on each job add up to a real number across a year.
Which part of the system fixes this?
The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone following up on them. It's drawn from chapter 6 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Make every material purchase have a PO with a job and a cost code, and refuse to pay a supplier invoice that has no PO.
How do I know material is being stolen and not just wasted?
You usually can't tell from the numbers, and you don't need to. You need to know that the material cost on a job is higher than the estimate and ask where it went. A PO and a daily tell you what was bought and what the crew said they used.
Should I track material in the yard too?
If you stock material, a simple count by the yard person each week helps. Charge material to the job when it leaves the yard, not when it's bought. That way a job doesn't look cheap just because you bought for the next one.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 06 depends on step 04, estimating system. Install it ahead of that and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.