Quoted revenue vs. collected revenue in job profitability
Separate quoted and collected revenue so unpaid balances do not get mistaken for weak contractor pricing or cash profit.
In short
Quoted revenue shows what the job should produce if the customer pays in full. Collected revenue shows the cash received so far. Calculating profit from both numbers separates pricing performance from payment timing.
One job can have two honest profit views
Suppose a job was quoted at $1,000, has $500 of direct cost, and the customer has paid $600 so far. The quote supports $500 of projected profit. The cash collected supports only $100 of cash profit today. Neither number is wrong; they answer different questions.
| View | Calculation | Result |
|---|---|---|
| Projected profit | $1,000 quote − $500 costs | $500 |
| Projected margin | $500 ÷ $1,000 | 50.0% |
| Cash profit | $600 collected − $500 costs | $100 |
| Cash margin | $100 ÷ $600 | 16.7% |
| Outstanding balance | $1,000 − $600 | $400 |
What the projected view tells you
Projected profit tests the price. If the full quote would still leave a weak margin after actual costs, the job was probably underpriced or the work ran over its assumptions. That is useful feedback for the next quote even before the last payment arrives.
Projected profit
quoted amount − actual direct job costs
This view assumes the quoted amount will ultimately be collected.
What the cash view tells you
Cash profit tests the result so far. A strong projected margin alongside weak or negative cash profit points to an unpaid balance rather than necessarily poor pricing. That distinction matters when deciding whether to adjust prices, follow up on payment, or both.
Cash profit
amount collected − actual direct job costs
When nothing has been collected, cash margin is not meaningful because its denominator is zero.
Do not silently treat the quote as cash
Using the quote in every dashboard can make unpaid work look profitable. Using only collected revenue can make a well-priced but partially paid job look like a pricing failure. Labelling both views avoids both mistakes.
- Record the original quote as the pricing benchmark.
- Update collected revenue when payments arrive.
- Record costs when they become known instead of waiting for payment.
- Review outstanding balances separately from margin trends.
Keep the operating view separate from the books
Cash and projected job-profit views help run the work, compare job types, and improve pricing. They do not decide when revenue must be recognized for tax or accounting purposes. Use your accounting system and professional advice for those decisions.
Calculate cash and projected job profit for free.