Profit fade
Profit fade is when a job's expected profit shrinks as it progresses — usually from cost overruns, unbilled changes, or optimistic estimates.
Catching profit fade early (via real-time job costing and estimate-vs-actual) is the difference between adjusting course and finding out a job lost money after it's done. Proactive margin-drift alerts exist specifically to catch fade while you can still act.
Related terms
- Estimate vs. actual — Estimate vs. actual compares what you bid for each part of a job to what it actually cost, revealing where your estimating was off.
- Job costing — Job costing is tracking the actual costs of a specific job — materials, labor, subs, and other expenses — against what you estimated, so you know the real profit on that job.
- Change order — A change order is a written modification to the original contract scope or price — added work, a selection upgrade, or a condition discovered on site.