Every job clears 30% margin. The business clears 9%.

When job-level margins are healthy and company margin isn't, the gap is not a mystery: it lives in four places, and each one behaves differently.

By Steve 5 min read
Abstract bridge artwork for Every job clears 30% margin. The business clears 9%.

A professional services firm reviews its job costing quarterly. Every completed engagement shows a gross margin between 27% and 34%. The average is a shade over 30%. The statutory accounts show an operating margin of 9%. Nobody is lying, nobody has miscounted, and the two numbers have almost nothing to do with each other. This gap is one of the most common and most expensive measurement failures in mid-sized businesses that sell time, projects or configured products. It matters because job margin is usually the number that drives decisions, which…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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