The job stops billing and keeps spending for a year
The last pay app went out a year ago and the job is still spending money. Inspections, BMP removal, and a reseed trip all add cost to a job your WIP already called finished.
Every other trade on that site closes out at an inspection sign-off, which is a date a human being controls and can be argued about. Your scope closes when a plant reaches a percentage of cover, and plants keep their own schedule. No other trade has a phase that extends a year past their last invoice, so no other trade's job cost structure ever had to account for one.
The size of it
Retention on silt fence you installed in month one of a 14-month civil job releases 12 to 18 months after the GC reaches substantial completion. In between, the job reads profitable in the WIP while the bank account keeps paying out.
Final stabilization under the EPA Construction General Permit gets measured against the dirt: uniform perennial vegetation providing 70% or more of the cover of the native undisturbed areas before anybody files the Notice of Termination. Caltrans writes the same idea into a Plant Establishment period that holds the contractor an additional 250 working days after every other construction activity is complete. So the job stays open through a full germination cycle while your crews are on other sites and the GC is long demobilized. Everything that happens in that window, from inspections and maintenance to BMP removal and reseeding, is charged to a job number with no billing left against it.
Three moves, in order
Step 01: Job cost structure
Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.
What else costs SWPPP and erosion control contractors money
The same mechanism in other trades
What SWPPP and erosion control owners ask
How do I job cost a site that keeps costing money after final billing?
The last pay app went out a year ago and the job is still spending money. Inspections, BMP removal, and a reseed trip all add cost to a job your WIP already called finished.
What does it cost?
Retention on silt fence you installed in month one of a 14-month civil job releases 12 to 18 months after the GC reaches substantial completion. In between, the job reads profitable in the WIP while the bank account keeps paying out.
What do I do first?
Set every job up with two phases from day one: construction, and stabilization through NOT. Post-billing trips go to the second phase where you can see them.
What are SWPPP and erosion control contractors supposed to be making?
SWPPP and erosion control has 24% gross margin, 14% overhead and 10% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 3 points above it. The CFOS target is 13.5%.
Which part of the system fixes it?
The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 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 SWPPP and erosion control contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.
What a fractional CFO does for SWPPP and erosion control contractors
Wrote CONTROL, the 8 step system behind these figures. More about the author.