Project work: where the margin is decided
On a commercial electrical project, labor is typically the largest cost and the only one you control once the job is bought out. The estimate assumed hours per unit for rough-in, wire pull, terminations, gear and trim; the job makes money if the field beats those hours and loses it if it does not. Job cost has to answer, weekly, whether that is happening, which means hours by cost code against estimated hours, not dollars against a budget.
| Cost code (typical) | What to track | Early warning |
|---|---|---|
| Rough-in by area or floor | Hours and units (boxes, feet of conduit) | Hours per unit above estimate in the first 20% |
| Wire and cable | Hours, feet pulled, material issued | Material issued ahead of hours |
| Gear and equipment | Committed cost on the gear PO; delivery date | Gear delays pushing labor into overtime |
| Terminations and trim | Hours and devices | Trim starting before rough-in is signed off |
| Lighting and controls | Material and subcontract (controls) | Controls subcontract change orders |
| Fire alarm / low voltage | Often a sub-tier subcontract | Compliance documents from the sub-tier |
- Gear and switchgear are the big commitments: issue the PO the day the submittal is approved so committed cost shows the buyout result
- Stored materials: gear delivered to site or a bonded warehouse can often be billed before installation; document it the owner’s way
- Change orders: price them from the same labor units as the estimate, submit them the week they arise, and carry the cost in the forecast whether or not they are approved yet
Service work: a different billing model, the same ledger
Service calls are billed time-and-material or flat rate, often the same day, with parts from the truck. Maintenance agreements are billed in advance and earned over the term. Neither looks like a pay application, but both need to land in the same ledger as the projects, with technician labor costed to the call, parts relieved from truck stock, and prepaid agreements held as deferred revenue until earned.
- Service revenue accounts separate from project revenue so margin by line of business is visible
- Truck stock as inventory, relieved to calls as parts are used, counted periodically; shrinkage is a real expense line
- Maintenance agreements as deferred revenue, recognized monthly over the term
- Technician time to the call or agreement, with burden, so service margin is real
The reports an electrical contractor needs
- Labor productivity by job and cost code: estimated vs. actual hours and units, weekly
- Job cost with budget, committed, actual and cost to complete by code
- WIP schedule with over/under billing for every open project
- Retainage receivable by job with expected release dates
- Service margin by month: revenue, technician labor with burden, parts
- Inventory on hand by truck and warehouse, with issues to jobs and calls
- Open change orders by job: submitted, approved, unapproved but performed
How Forge ERP fits an electrical contractor
Forge’s Specialty Trades specialization sets up the chart of accounts for both sides of the business (truck stock and warehouse inventory, deferred service contract revenue, service call and maintenance contract revenue separate from project work revenue, technician wages, vehicle costs) with service, phase, location, customer and warehouse dimensions, and enables procurement, projects, project ledger, inventory, cost catalog, revenue and time. Project work bills the GC or owner on AIA-style pay applications with per-line retainage and stored materials; purchase orders and subcontracts post as committed cost; time entry posts labor by job and cost code; and cost-to-complete forecasts are entered by cost code and approved before they drive WIP. Dispatch and field service scheduling run in the tools your service department already uses.
Forge ERP covers projects, purchasing, accounts payable, billing and receivables, job cost and WIP, reporting and close. Payroll runs in your payroll provider and lands in Forge as job-costed labor with burden. Forge is in beta with a 14-day free trial.
Frequently asked
- Should service and project work be separate companies?
- Usually not; they share crews, trucks, inventory and overhead. Keep them as separate revenue and cost lines, with dimensions or departments, in one ledger so margin by line of business is visible without intercompany entries.
- How do I cost truck stock to jobs?
- Treat trucks as inventory locations. Parts move from warehouse to truck on a transfer and from truck to a job or service call on an issue. Expensing material on purchase makes every job look cheaper than it is and every truck a black hole.
- Can Forge handle certified payroll for prevailing-wage electrical work?
- Payroll, including certified payroll reporting, runs in your payroll provider. Forge receives the job-costed hours and burden so job cost and WIP are right; the certified payroll report itself comes from the provider.