Owner: “Every job on the report shows a 40 percent margin. Our bank account says we are running at 6 percent. Somebody is lying to me.”
Me: “Show me yesterday’s biggest job, and let’s walk it from the first phone call to the final invoice.”
That is how the ERPNext Consulting review started at a 120-technician heating and electrical contractor. It took three hours to find the answer, and it was not fraud.
The job that looked like a winner
A commercial rooftop unit replacement, quoted at $18,400. The report showed $7,100 of gross profit, a 39 percent margin. Solid work by any standard.
Then we rebuilt the job from the actual records. Two technicians for a day and a half, but the report only counted 12 hours, because the clock started when they arrived and stopped when they left, and the yard is 50 minutes from the site. Parts came off the van, which nobody tracked. The crane subcontractor’s $1,900 invoice went to the company books, not to the job.
Eleven days later, a technician went back to replace a faulty sensor at no charge. That visit existed nowhere. Real margin on that job: 4 percent, not 39.
Four gaps that made every job look better than it was
- Drive time was invisible. Across 120 technicians, that was roughly 700 unpaid hours a month appearing as profit.
- Van stock was a black hole. Parts were pulled and consumed, but only the ones bought for a specific job got charged to it.
- Warranty callbacks were not linked to the original job, so rework looked like a fresh service call with its own revenue line.
- Subcontractor and permit invoices were recorded company-wide, never attached to the job that needed them.
The conversation that changed the pricing
Once jobs were costed honestly — the part of the ERPNext Consulting project that took the longest and mattered the most — a pattern appeared within three weeks. About 22 percent of jobs lost money, and nearly all of them were the same type: after-hours emergency calls on equipment older than 15 years.
The company had been pricing after-hours work at 1.5 times the standard rate. Real cost, including drive time and the callback rate on old equipment, was closer to 2.4 times. They moved to 2.2 times for anything over 12 years old and stopped advertising same-night service for that equipment class.
Company-wide margin went from 7 percent to 15 percent over nine months, on flat revenue. Nothing was sold differently, and nobody was let go. The only thing that changed was what the company knew about each job.
This week, take your ten largest jobs from last month and add drive time, van parts, and any repeat visit. Recalculate the margin yourself and compare it to the report. You may not like the answer, but at least it will be one you can act on.