Site-by-Site Profit Reporting for a Housebuilder’s Board – Gerry’s Story

Introduction

Gerry (not his real name) runs a housebuilding company with several sites live at once. Each month the board received a set of accounts for the company as a whole: one sales figure, one cost of sales, one gross profit.

Josef, Gerry’s Virtual Finance Director (VFD), knew that a single company total can hide a lot. Good sites can carry weak ones, and by the time anyone notices, the money has gone.

Situation

Several house sites being built at the same time.
Monthly accounts showed the company’s total profit, but not which sites were making it.
Costs and work in progress were spread across all the sites, so no one could compare like with like.

Obstacles

Costs coded inconsistently. Labour, materials and plant were not always recorded against the right site.
Work in progress. Valuing part-built homes and infrastructure site by site, at the start and end of every month, is the only way to match costs to the homes actually sold.
Roads and sewers. Infrastructure costs are large and come early, so mixing them in with the house costs distorts the cost of building each home.
Board time. The directors needed one clear page, not a stack of spreadsheets.

Action

✔ Every cost coded to its site, and split between labour, materials, plant hire, and roads & sewers.
✔ Work in progress valued site by site, with opening and closing figures every month, so the cost of sales matched the sales.
✔ A one-page report for the monthly board pack, listing every live site side by side with its sales, its cost of sales split four ways, its gross profit and its gross margin.
✔ Cost per square foot calculated separately for the houses and for the roads & sewers, so sites of different sizes could be compared fairly.
✔ Monthly variance reports highlighting where each site was moving away from what was expected.

Result

✅ The board could see every site’s profit every month, not just at the end of the job.
✅ Like-for-like comparisons showed straight away which sites were being built efficiently and which weren’t.
✅ Problems surfaced early. The site-by-site figures and variance reports picked up a brickwork overspend that led to a £2.5m saving, and stone cottages being sold too cheaply, which recovered £3.84 million, along with many smaller issues.
✅ Better decisions on pricing, buying land and where to focus management time.

Conclusion

The figures were always there, just not in a shape anyone could use. Once each site had its own profit line, with costs split the same way and work in progress valued properly, the board stopped looking at one company total and started managing each site.

Josef created the report and used it himself first. Each month he went through it to spot problem areas, prepare scenarios and work out possible actions the business could take to solve issues, before releasing it to the board with the rest of the monthly pack.

That one change in reporting is what made the bigger wins possible.