CONSTRUCTION OPERATIONS GUIDE
Download the Excel template
Free .xlsx workbook. It includes a blank log and the worked Maple Avenue example.
Use this Excel construction job costing template to review those amounts by cost code. Start with one active job and use the same cut-off each week so you can explain what changed and decide who needs to act.
What is construction job costing?
Construction job costing assigns labour, materials, subcontractors, equipment, and other direct costs to the job and scope they belong to. A cost code is the label that connects those records to the same piece of the budget. For example, code a mechanical trade’s purchase order and its supplier invoices to Mechanical so you can compare them with the budget for that work.
A weekly job cost report goes beyond a budget-versus-actual comparison. Actuals tell you how much cost has been recorded so far. Open commitments and the remaining forecast tell you how much more you expect the job to cost. Keep those three amounts separate so a late invoice can’t make the project look cheaper and a posted invoice can’t count twice. Save the final cost by code to help estimate similar work on future bids.
What each column in the job costing template means
Use one row per cost code in the Excel spreadsheet. The template calculates the revised budget, forecast final cost, and variance as you enter job cost data.
Field | What to enter or calculate |
|---|---|
Original budget | The starting cost budget for the code. Keep it as a baseline. |
Approved cost adjustments | Increases or decreases to the cost budget that your team has approved. |
Revised budget | Original budget plus approved cost adjustments. |
Actual cost to date | Costs recorded through your review cut-off, such as posted supplier invoices and coded labour or equipment charges. |
Open commitments | The portion of issued purchase orders or subcontracts still expected to become a cost and absent from actuals. |
Remaining uncommitted forecast | Other costs you expect on the code that are outside actuals and open commitments. Examples include your own crew’s remaining hours and work you still need to buy. |
Forecast final cost | Actual cost to date plus open commitments plus the remaining uncommitted forecast. |
Forecast variance | Revised budget minus forecast final cost. With this convention, positive is favourable and negative is unfavourable. |
Build the budget rows from the accepted estimate or the project’s approved cost plan. Start with the codes you already use to review work. Then assign each cost to the same code on the budget, purchase order, and supplier invoice. If one invoice covers more than one code, split the cost using the supporting line items. Keep a source reference for each adjustment so someone else can check the number later. For a spreadsheet shared by multiple project managers, assign one person to reconcile each job before the weekly review.
Set up the Excel worksheet for one job
Open the blank job costing worksheet, then fill in the job name and the as-of date for your review. Create one row for each cost code from your estimate. Enter zero for a cost you’ve checked and confirmed has no amount. Leave an input blank while you’re still checking it. The worksheet shows how many cost codes still need inputs and leaves their variance blank. Complete those rows before relying on the project totals.
Worked example from a residential addition
On the fictional Maple Avenue Addition, a revised beam crosses the planned duct route. The client approves the reroute under CO-07, adding $3,450 to the client contract. The contractor adds $2,600 to the Mechanical cost budget for the extra work. The contract amount tracks what the client agreed to pay. The cost budget tracks what the contractor expects to spend. Use the same change order reference to find both decisions. See how CO-07 moves from a site question to a client invoice.
The Mechanical line shows the forecast at Friday’s review.
Mechanical cost line | Amount |
|---|---|
Original budget | $14,000 |
Approved cost adjustment for CO-07 | $2,600 |
Revised budget | $16,600 |
Actual cost to date | $7,800 |
Open commitments | $5,400 |
Remaining uncommitted forecast | $3,000 |
Forecast final cost | $16,200 |
Forecast variance | $400 favourable |
The forecast is $7,800 + $5,400 + $3,000 = $16,200. The $400 favourable variance is the amount Mechanical is forecast to finish below its revised cost budget. Check the forecast for the entire construction project as well. On this project, the combined forecast is $74,100 against a $73,700 revised cost budget, so the job is $400 unfavourable overall. The project manager can then open the cost codes driving the difference and check the source records.
Compare budget spent with forecast variance
Mechanical has recorded about 47% of its revised budget so far ($7,800 ÷ $16,600). The forecast is much closer to the budget once it includes the committed cost and the estimate for the work still to complete. If a supplier quote comes in $600 above your remaining estimate, the forecast rises to $16,800 and the variance becomes $200 unfavourable. The project manager can then check the quoted scope and agree on an action before issuing a purchase order.
How to count a partially invoiced purchase order once
One Mechanical purchase order is for $6,000. The contractor has posted a $3,600 supplier invoice against it, and that amount is already included in the $7,800 of actual costs. The order still has $2,400 open, a committed cost already agreed to but not yet fully recorded in actuals. Another $3,000 remains open on other Mechanical commitments, bringing the line’s total open commitments to $5,400. Use the same tax basis when comparing the order and its invoice.
If you carried the full $6,000 order into open commitments, the $3,600 would also appear in actuals and inflate the forecast by that amount. Match each posted invoice to the purchase order it draws against so you can confirm the cost code and carry only the expected balance. If the trade has finished and the final invoice is lower than the remaining order, confirm the unused balance with purchasing before clearing it from the forecast.
Review client billing separately. The $3,450 client change can be approved, partly invoiced, fully invoiced, or paid while your Mechanical costs follow a different timeline. The job costing report follows those costs. The change order log and client invoices show how much you’ve billed and what remains to bill.
Run a weekly job cost review
Update actuals to the same cut-off. Pull posted supplier invoices, coded time, and other recorded direct costs through Friday, or the day your team reviews. Record actual expenses as supporting records arrive so the team can spot overruns early. Resolve missing job codes with whoever owns the source record. Ask the site lead about completed work or received materials whose costs are still pending.
Reconcile open commitments. Match each posted invoice against its purchase order or subcontract. Review remaining amounts on completed or cancelled work. If a cost has yet to post, keep it visible in the open balance or the uncommitted forecast, according to where it belongs. Move it to actuals when recorded so it stays in the forecast only once.
Review approved changes and pending exposure. Record approved cost adjustments against the relevant codes. For an unresolved change, record the expected cost and decision date. If you expect to incur that cost, include it in the appropriate forecast bucket and keep the approved budget tied to the decisions already made. Start with cost categories you can maintain consistently. Split a code when the extra detail will help you act on the variance.
Ask the site lead what’s left. Use the schedule and the work in place to check remaining crew hours, material quantities, rentals, and trade work. If drywall moved back a week, check whether the delay also adds a rental week or a return trip. Update the forecast when the remaining work changes.
Assign actions where the forecast moved. For each material variance, record the cause, owner, next step, and due date. For example, ask the project manager to confirm a second equipment pickup with the rental company by Tuesday. At the next review, check whether the action closed and whether the estimate changed.
Save the review date and forecast by cost code. At the next weekly review, compare the latest figures with the previous forecast and the revised budget. Review vendor payments and client receipts separately when planning cash flow. If a code swings from favourable to unfavourable, you’ll have the prior assumptions and the source records to find the cause.
Review job costs in Konstructo
Konstructo keeps project budgets, purchase orders, supplier bills, change orders, and client invoices with the job. Review the financial summary, then open the source record behind a cost question. Explore Konstructo Cost Management.
Bring one active job and a cost code you want to reconcile. Book a Konstructo walkthrough.