An audio-visual installation company had 14 active projects, a full order book, and a cash balance that kept shrinking. The owner was personally covering wages and supplier bills. When he reviewed the three largest projects, each looked profitable on paper. Yet the bank account said otherwise. The explanation was embarrassingly simple: the timesheets were filled in every Friday from memory, and materials purchased for one job were regularly charged to another job to make that job’s numbers look better.
Fake project margins hide real losses
For one school auditorium job, the estimate allowed 220 hours of installation labor. The team actually spent 340, but engineers recorded the extra time on a different project because that project still had budget left. In the end, the job that looked profitable had actually soaked up six extra paid days. As the owner said: “We didn’t lose the project. We lost track of the project.”
The owner brought in ERPNext Consulting for a margin audit. The consultants compared the quote hours against actual booked time for every project finished in the last two years. The result was uncomfortable: actual labor exceeded quoted labor by an average of 21%, and one-third of all “extra” materials had been silently absorbed.
Daily time entry and the approval rule
The fix was not about sophisticated planning. It had two parts:
- Each technician spends 15 minutes at the end of the day entering time against a specific project task. Friday catch-up sessions are forbidden.
- No supplier invoice or expense can be coded to a project unless a purchase order exists for that project. If the project runs over its quoted hours, the system blocks further uncontrolled spending before the overrun eats the cash.
Engineers hated the daily entries for exactly two weeks. Then they noticed a benefit: their own weekly reports about “how busy we were” turned into precise numbers, and the owner stopped asking them to redo timesheets from memory.
What the numbers look like after a quarter
Within 90 days, labor overruns on active projects dropped from 21% to about 4%. More importantly, the owner could see, in real time, which projects were consuming their contingency. One installation that was quietly 30% over budget surfaced early enough that he could renegotiate the client’s change requests instead of swallowing the cost.
An unapproved extra is a gift from the installer to the client. ERPNext Consulting set the rule that any variation above 5% of a quoted project requires the client’s written confirmation before work continues. That single change recovered more margin than the license fees for years. Tracking time daily is inconvenient at first, but it is the only way to catch a bleeding project before the cash runs out.