Set up cost codes that match how you estimate and build. Most custom builders break projects into phases: site work, foundation, framing, roofing, mechanicals, exterior finish, interior finish, final. Within each phase, separate labor, materials, and subcontractors. This structure lets you compare actual costs to your estimate at a level detailed enough to be useful.

Every expense gets coded to a job and a phase. When you buy lumber, it goes to framing materials on that specific project. When a plumber invoices you, it goes to mechanicals subcontractor on that project. When your crew logs hours, those hours hit the appropriate phase. No exceptions, no “miscellaneous,” no dumping costs into general overhead because coding takes too long.

Track labor hours by phase, not just by day. A crew that works on framing in the morning and trim in the afternoon needs to split their time accordingly. This seems tedious until you realize you’ve been losing money on interior finish for years and never knew because all the labor was lumped together.

Get subcontractor invoices coded correctly before you pay them. Subs are often 50% or more of a custom home’s cost. If those invoices just hit a general subcontractor expense account, your job costing is fiction.

Compare budget to actual weekly during active construction. A monthly review means you find out about the framing overrun after the house is dried in. A weekly review means you catch it while you can still adjust. Build a simple report showing budgeted cost by phase versus actual cost to date plus committed costs.

Committed costs matter. You’ve signed a contract with an electrician for $28,000 but only received invoices for $12,000 so far. Your spent-to-date looks fine. Your actual position is that electrical is already $2,000 over budget once the remaining invoices arrive. Track commitments, not just payments.

Change orders need separate tracking. The homeowner adds a coffered ceiling mid-build. That’s not an overrun on interior finish. It’s additional scope with additional budget. Keep original contract amounts separate from approved changes so you can see true performance against the original estimate.

Use software that handles job costing properly. QuickBooks can do it with classes and projects configured correctly. Construction-specific software like Buildertrend or CoConstruct handles it more naturally. The tool matters less than the discipline to use it consistently.

The payoff is knowing your real margins by project and by phase. You stop bidding trim carpentry too low because you can see it runs over on every job. You stop using that one excavator who’s cheap on the bid but always hits you with extras. Your estimates get better because they’re built from actual cost history, not guesses.