Construction cost to complete calculator
For a job part way through: what has been spent, what is promised on POs and not yet billed, and what is left to buy. See where the job will finish against its budget, without counting a billed PO twice.
Whole job
- Budget
- $96,000
- Actual cost to date
- $46,500
- Open commitments (unbilled POs)
- $21,200
- Cost to complete
- $48,900
- Cost at completion
- $95,400
- Projected finish against budget
- $600 under
Remaining budget is not cost to complete. Budget less actual says $49,500 is left. What the job still needs is $48,900.
70.5% of the budget is already spent or promised. Adding the full PO value to actual would say $89,600, counting the billed part of each PO twice.
Worked example: a kitchen renovation part way through
The figures the calculator opens with. The job and its numbers are fictional and illustrative, not a benchmark.
| Line | Budget | Actual | Open POs | To complete | At completion | Against budget |
|---|---|---|---|---|---|---|
| Labour | $38,000 | $21,500 | $0 | $15,500 | $37,000 | $1,000 under |
| Materials | $29,000 | $14,200 | $5,700 | $15,500 | $29,700 | $700 over |
| Subcontracts | $24,000 | $9,000 | $15,500 | $15,500 | $24,500 | $500 over |
| Equipment & other | $5,000 | $1,800 | $0 | $2,400 | $4,200 | $800 under |
| Job | $96,000 | $46,500 | $21,200 | $48,900 | $95,400 | $600 under |
Materials has $18,600 of POs out, of which $12,900 has been billed. Only the unbilled $5,700 is still to come; the rest is already in its $14,200 of actual cost, alongside a bill that had no PO. The job as a whole finishes $600 under, but materials and subcontracts are each heading over and labour and equipment are covering for them.
The two mistakes this avoids
Reading remaining budget as what is left to spend
In the example, budget less actual leaves $49,500. The job still needs $48,900. The gap is small here and large on a job where most of the cost is already on order, which is exactly when it matters.
Counting a billed PO twice
Actual cost plus every PO at full value says $89,600 is spent or promised. The right figure is $67,700, because the billed part of each PO is already in actual cost.
Related reading: the job costing worked example follows a single job as POs and bills arrive, and the cost codes guide covers how to split a budget into lines worth tracking.
Questions
- How do you calculate cost to complete on a construction job?
- Per cost line: take the purchase orders and subcontracts you have issued, subtract what has already been billed against them, and add your estimate of what is still to spend with no PO behind it yet. That is the cost to complete. Add it to actual cost to date and you have the cost at completion, which is what you compare with the budget.
- What is the difference between remaining budget and cost to complete?
- Remaining budget is budget less actual cost: it says how much money is left. Cost to complete says how much the job still needs. A line can have budget left and still be heading over, because POs already issued and work not yet bought can need more than what remains.
- How can I track construction job costs before all supplier invoices arrive?
- Count a purchase order as committed cost from the day you issue it. Until the bill arrives the PO is the best record of what you owe, so the job shows the spend before the supplier invoices. When the bill comes in, that amount moves from committed to actual, and only the unbilled part of the PO is still to come.
- Why not just add committed cost to actual cost?
- Because part of each PO may already be billed, and that part is already inside actual cost. Adding the full PO value counts it twice and makes the job look further spent than it is. The calculator subtracts what has been billed against the POs before adding the rest.
- Where does a bill with no purchase order go?
- Into actual cost, and nowhere else. It has no commitment to reduce. If bills without POs are common on a line, the line's committed figure understates what is coming, which is a reason to raise POs for anything you order.
- Does this forecast the cost for me?
- No. The figure for what is still to spend with no PO is your own estimate, and the result is only as good as it. The calculator does the arithmetic so the parts are not double counted or left out.
- Should the budget include change orders?
- Use the current budget: the original plus approved change orders that added cost. Leave pending change orders out until they are approved, or the job will look better than its contract.
Keep the first three numbers current without retyping them
In BuildersBridge a purchase order counts as committed cost from the day it is sent, and an approved bill against it moves that amount to actual. Budget, committed, actual and remaining sit on every job. What is still to buy with no PO stays your call.
Related: profit margin calculator · budget template · purchase order template