The Audit

Your books are right and your jobs are lying to you. This is how to find out which ones, and what it is costing you to not know.

Your bank balance is right. Your profit and loss is right. Then you open one job and you cannot say within a thousand dollars what it made.

That is the normal condition of a business that sells jobs, and it is not a bookkeeping failure. A job's cost is not a number you hold. It is a number you assemble, weeks after the work is over, out of documents that arrive from other people on other people's clocks.

Five things stack up. Cost lands late. Cost lands in the wrong column. Cost lands on the wrong job. The credit never lands at all. And the rate was never written down. Not one of them is carelessness, and together they make your job numbers unusable while every total you look at still reconciles perfectly.

What is in it

• Twelve rules of evidence, each one written after something went wrong.
• How to reconcile a year of payments in a single day, without opening a document until the sorting is finished.
• How to audit labor when nobody ever wrote the price down.
• Material, a single job all the way to the bottom, and what happens when a bookkeeping error comes out of somebody's paycheck.
• The arguments that are not about money: whether your lead distribution is fair, whether your territory map is lying to you, what the driving costs, and which lead source is quietly the worst one.
• One chapter on every time this method produced a confident wrong answer, what caused each one, and what rule came out of it.

It came out of a live residential contracting company and one full year of real audits. No software required. Every method in it has been run in a spreadsheet.