Most roofing owners know one margin number: the one at the bottom of the P&L. It averages a $22,000 retail reroof, a $450 repair call and a flat-roof commercial bid as if they were the same business. They are not. Each job type has its own material mix, crew productivity, sales cost and overhead load. Until the books separate them, you are pricing on a blend and guessing which type is carrying the others.
What a Blended Margin Hides
All figures below are illustrative. Use your own reports. Assume $1,200,000 of annual revenue and $240,000 of overhead (20% of revenue, split evenly by revenue for this first pass).
| Job type | Revenue | Direct cost | Gross margin | Net after overhead |
|---|---|---|---|---|
| Retail reroof | $540,000 | $410,400 | 24.0% | 4.0% ($21,600) |
| Insurance reroof | $450,000 | $355,500 | 21.0% | 1.0% ($4,500) |
| Repairs | $150,000 | $90,000 | 40.0% | 20.0% ($30,000) |
| Commercial flat roof | $60,000 | $51,000 | 15.0% | -5.0% (-$3,000) |
| Total | $1,200,000 | $906,900 | 24.4% | 4.4% ($53,100) |
The blended 24.4% looks acceptable. Underneath, repairs produce $30,000 of net profit on 12.5% of revenue, while commercial work costs the company $3,000 and insurance reroofs, 37.5% of revenue, add only $4,500. Without the split, an owner might add a second commercial crew.
How to Report Margin by Job Type
- Define four to six job types and stop. Retail reroof, insurance reroof, repair, commercial and new construction cover most roofers. More categories make the data thin.
- Tag every job at creation. In QuickBooks Online, use classes or a job-number prefix such as R, I, P, C. Tagging after the fact never gets done.
- Carry the tag onto bills and payroll. Revenue tagged without cost tagged produces fiction. Materials, subcontractors, labor and dump fees all need the same job type.
- Run the P&L by class quarterly. Compare gross margin first, then net after overhead. Our overhead recovery guide explains how to set the rate.
- Check the insurance line separately. Supplements, depreciation holdback and slow payments change the true margin on claim work. See insurance claim accounting.
What to Do with the Result
Compare each type to your target using markup versus margin math. In the example, commercial work needs roughly a 25% gross margin to cover the 20% overhead load and earn a 5% net, so a 15% bid needs about $8,000 more on the same $51,000 of cost (a price near $68,000, up 13%), or a pass. Repairs at 40% deserve a marketing budget: a maintenance program or faster dispatch grows your most profitable type.
Insurance work raises a different question. If margin is thin, check whether supplements are being captured and whether tear-off and decking exposure is priced. Then use the closeout review to find the cause.
Common Mistakes
- Splitting overhead evenly and stopping. Small repair calls consume dispatch and office time, so their true net is lower than shown. Refine the split once you have a quarter of data.
- Judging a type on one quarter. Storm season distorts mix. Use 12 months.
- Dropping a low-margin type without checking crew utilization. If it keeps a crew busy in a slow month, the lost contribution may exceed the loss shown.