Project Profitability Calculator
Forecast the final cost and margin on a live project using committed cost rather than invoices received. Most margin calculators ask only for cost to date, which on a construction project excludes purchase orders issued and subcontracts awarded — money already promised that will not appear in the accounts for another four to six weeks. Adding actual, committed and cost to complete gives the estimate at completion, and that is the only margin worth acting on while the job is running.
Step 1 of 3
The contract
Excluded from revenue and shown separately as upside. That is what auditors require and it is the right commercial position.
Step 2 of 3
Cost position
Invoices received and posted.
Purchase orders issued, subcontracts awarded, plant on hire. Money already promised. This is the field most margin calculators do not ask for, and the reason yours is wrong on almost every live project.
Remaining work, your own estimate.
Step 3 of 3
Billing and progress
Only if you measure it independently of cost. Leaving it blank uses cost progress instead, and the comparison below becomes unavailable.
Forecast final margin
AED 0
Enter your details to see the estimate.
| Breakdown | Amount |
|---|---|
| Revenue (contract + approved variations) | — |
| Actual cost to date | — |
| Committed, not yet invoiced | — |
| Cost to complete | — |
| Estimate at completion (EAC) | — |
| Forecast final margin | — |
| Cost-based progress | — |
| Physical progress | — |
| Earned value | — |
| Certified to date | — |
| Over / under billing | — |
| Retention held | — |
| Unapproved variations (upside, excluded) | — |
Calculated in your browser. Your figures never reach our servers, and nothing you type here creates a record.
An estimate based on the figures you entered. Model your own numbers before committing to a decision.
The concept
Three costs, not one
Actual cost — invoices received and posted. What your accounts show.
Committed cost — money contractually promised but not yet invoiced. Purchase orders issued, subcontracts awarded, plant on hire. It exists the moment the order is raised.
Cost to complete — your estimate of the work remaining. A judgement, made by the person running the project.
Add all three and you have the estimate at completion. Subtract it from revenue and you have the forecast margin — the only margin figure worth acting on while the project is live.
Show the working
The formulas
revenue = contract + approved variationsUnapproved variations never count.EAC = actual + committed + cost to completeEstimate at completion.forecast margin = revenue − EACThe number that lets someone act.cost progress = (actual + committed) ÷ EACHow far the money has gone.earned value = revenue × progressWhat you have actually earned.over / under = certified − earned valuePositive means over-billed.Worked example. Contract AED 10,000,000 with AED 500,000 of approved variations, so revenue is AED 10,500,000. Actual cost to date AED 4,200,000, committed AED 1,800,000, cost to complete AED 3,900,000 — an EAC of AED 9,900,000. Forecast margin AED 600,000, or 5.7%.
On actual cost alone the project looks like it has spent 4.2m against 10.5m and is comfortable. The committed 1.8m is what turns a comfortable-looking job into a thin one.
The question everyone gets wrong
Why your accounts show a healthy project three weeks before it isn’t
A purchase order raised on Monday is money spent. It appears in the accounts when the supplier invoices — typically four to six weeks later.
On a project where procurement runs ahead of delivery, the gap between committed and actual cost can be a full month’s spend. During that month the accounts show a margin that no longer exists.
Contractors who track committed cost see an over-run when the order is raised, while there is still something to do about it. Contractors who do not, see it when the invoice arrives — by which point the material is delivered, the subcontractor has started, and the over-run is a fact rather than a choice.
That gap is the single largest recoverable cause of margin loss in UAE contracting.
Frequently asked questions
Project margin questions
What is estimate at completion (EAC)?
The total the project is forecast to cost by the time it finishes: actual cost to date plus committed cost not yet invoiced plus your estimate of the cost to complete. Subtracting it from revenue gives the forecast final margin.
What is committed cost and why does it matter?
Money contractually promised but not yet invoiced — purchase orders issued, subcontracts awarded, plant on hire. It exists the moment the order is raised, but reaches the accounts weeks later. That gap is where a comfortable-looking project quietly becomes a thin one.
How do I calculate cost to complete?
It is a judgement rather than a formula: the person running the project estimates the remaining work. A cost-to-complete taken as “budget minus spent” is not an estimate, it is an assumption that nothing has gone wrong.
What is over-billing and under-billing?
The difference between what you have certified and what you have actually earned. Certifying ahead of progress is over-billing, which flatters cash and creates a liability; certifying behind it is under-billing, which is lending the client money.
Should unapproved variations count as revenue?
No. Submitted but unapproved variations are shown separately as upside and excluded from revenue. That is what auditors require and it is the right commercial position — counting them turns a forecast into a hope.
What is earned value?
Revenue multiplied by progress: what you have actually earned at this point in the job. Compared against what has been certified, it shows whether you are over or under billed.
How often should I run this on a live project?
Monthly at minimum, and weekly on anything above a few million. The value is entirely in the frequency — an annual calculation is a post-mortem, not a control.