Compare win rate and project margin on one eligible cohort
A higher win rate is not inherently better, and a higher project margin is not enough to decide every bid. Define eligible decided quotes for one period and comparable scope before combining user-entered win probability with contribution, pursuit cost and capacity.
| Measure | Calculation / record | Boundary |
|---|---|---|
| Win rate | Won quotes ÷ eligible decided quotes | Open, withdrawn and no-decision quotes reported separately |
| Expected contribution per opportunity | User-entered win probability × contribution if won − pursuit cost | Not a promise that the probability will occur |
| Realised project contribution | Won-job price − reconciled included costs | Keep separate from pipeline expectation |
| Capacity and cash | Named scarce capacity and dated funding exposure | Include only evidenced alternatives and timing |
Define the decision before calculating
Record these inputs and boundaries
- Reconcile labour, materials, subcontractors, travel and allocated overhead. (not complete)
- Use the same scope, period, currency and tax basis for every bid case. (not complete)
- Identify scarce capacity and the feasible alternative use. (not complete)
- Map billing, payment and supplier-payment dates. (not complete)
- Write downside, approval and walk-away conditions. (not complete)
Compare a labelled base and downside scenario
| Decision input | Base case | Downside or boundary case | Decision checkpoint |
|---|---|---|---|
| Job contribution | 10,000 price − 9,200 reconciled job costs = 800 | 800 − 600 plausible rework = 200 | The downside remains positive but is not the complete bid decision |
| Same-period capacity alternative | Confirmed alternative job contribution = 1,400 | 1,400 − 200 downside contribution = 1,200 opportunity gap | The bid would displace the stronger confirmed use of capacity |
| Dated cash consequence | 6,000 labour and supplier outflow on 7 August | 10,000 customer receipt expected on 30 September; bid creates a 6,000 interim funding gap | No-bid as submitted; reconsider only if price, scope or payment terms change |
- Calculate the job contribution from a complete cost boundary.
- Run a downside case for the material scope and delivery uncertainties.
- Compare capacity with the next-best feasible use.
- Model cash dates separately from the profit view.
- Accept, re-scope, change terms or decline against recorded conditions.
Interpret the result and choose the next step
Use job contribution as the first screen, then ask what capacity the work consumes, when cash arrives, which costs disappear if you decline and what evidence supports any strategic benefit.
Run the exact calculation in the registered planner
- Job Costing & Margin Planner
Compare quoted and actual job economics and identify overruns
Decision questions
- Is a low-margin job always bad?
- No. The decision depends on the complete cost boundary, capacity, cash timing and credible alternatives. Low margin is a prompt for review, not an automatic verdict.
- Should promised future work justify the bid?
- Treat uncommitted future work as uncertain. Do not use it to hide a weak current-job case unless the commitment and economics are separately evidenced.
Method and source scope
- Job Costing Margin methodology — Margin101: Product-owned calculation, units, assumptions and limitation contract used by this guide.