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Variance Analysis

Variance analysis helps you identify cost codes that are over or under budget, enabling proactive management of project profitability.

Understanding Budget Variance​

The Total VS Projected column shows the difference between your budget and projected costs:

IndicatorColorMeaning
↓ AmountGreenUnder budget (good)
↑ AmountRedOver budget (at risk)

Formula: Variance = (Budget + Change Orders) - Projected Cost

  • Positive variance (green) = You're projected to spend less than budget
  • Negative variance (red) = You're projected to spend more than budget

Identifying Problem Areas​

Red Flags to Watch​

  1. Large negative variances - Cost codes significantly over budget
  2. Rising committed costs - POs and unapproved time exceeding budget
  3. Early overruns - Billed costs already exceeding budget before work is complete
  4. Margin compression - Projected margin below estimated margin

Using the Summary Cards​

The summary cards provide quick project-level indicators:

Projected Total Costs Card:

  • Shows "MORE THAN BUDGETED" or "LESS THAN BUDGETED"
  • Percentage indicates how far off budget you are

Total Margins Card:

  • Compares projected margin to estimated margin
  • "TARGET MET" appears when projected meets/exceeds estimated
  • Missing this target means profitability is at risk

Tracking Variance Costs​

Variance bills capture costs that exceed your original budget. These are tracked separately in the Budget Variance column and Bills/POs (Variance) detail section.

When to Create Variance Bills​

  • Material costs exceeded estimate
  • Additional labor was required
  • Unexpected site conditions increased costs
  • Supplier price changes

Viewing Variance Details​

  1. Find a cost code with values in the Budget Variance column
  2. Click to expand the row
  3. Look at the Bills/POs (Variance) section
  4. See individual variance bills and amounts

Margin Tracking​

Job Costing tracks two margin percentages for each cost code:

Estimated Margin​

Your planned profit margin from the original contract.

Formula: Estimated Margin = (Client Price - Estimated Cost) / Client Price × 100%

This is set at contract signing and represents your target.

Projected Margin​

Your expected profit margin based on projected costs.

Formula: Projected Margin = (Total Client Price - Projected Cost) / Total Client Price × 100%

This updates as actual costs come in.

Comparing Margins​

SituationWhat It Means
Projected > EstimatedBetter than planned profit
Projected = EstimatedOn target
Projected < EstimatedProfit at risk

Responding to Variances​

For Under-Budget Cost Codes​

  • Verify costs are truly complete (not just delayed billing)
  • Consider if savings can offset overruns elsewhere
  • Document what drove the savings for future estimates

For Over-Budget Cost Codes​

  1. Investigate the cause - Review bills and time entries to understand why
  2. Assess remaining work - Is more spending needed?
  3. Consider change orders - Can additional scope be billed to homeowner?
  4. Create variance bills - Track overruns for visibility
  5. Update projections - Mark complete if no more costs expected
  6. Learn for future - Note what drove the overrun for future estimates

Filtering for Variance Analysis​

Use the filter menu to focus on specific cost codes:

  1. Click the filter icon in the toolbar
  2. Select Cost Codes to filter by specific categories
  3. Use Is Complete to see only incomplete cost codes (where variances can still change)

This helps you focus on areas that need attention.

Using Cost Code Completion​

Marking a cost code Complete affects variance calculations:

  • Before complete: Projected cost assumes you'll spend at least budget
  • After complete: Projected cost equals actual spending

This is important for accurate variance analysis. Only mark complete when you're confident no more costs will be incurred.

Export for Detailed Analysis​

For deeper analysis, export job costing data:

  1. Click Export to CSV
  2. Open in spreadsheet software
  3. Create pivot tables or charts
  4. Compare across multiple projects

This is useful for identifying patterns across your portfolio.