A quote that does not match actual cost: what it costs and how to fix it

Every accepted order is a bet that the price still covers the work. In a batch plant that bet sits on the formula: what the ingredients cost, what yield the recipe returns, and whether the line has room to run it. In a cabinet shop or a construction job it sits on materials, hours, and the changes that show up after the bid. When those inputs are old, the quote can be confident and wrong at the same time.

The usual failure is not a bad salesperson. It is a cost that was last touched when someone had time. Ingredient markets, steel, and component prices do not wait for that afternoon. A yield that slipped for three weeks is still sitting at the theoretical number from the original spec. A substitution the floor already approved never makes it back to sales.

The damage shows up late. Purchasing sees the price. Production sees the yield or the scrap. Finance sees the margin after the batch is closed or the job is invoiced and the customer has the goods. Nobody owns the gap in the moment the order is accepted, which is the only moment the price can still change.

The order goes out. The material swing has already taken the margin, and the quote never showed it. The plants and shops that quote cleanly use the same decision with a cost that moves when ingredients, yields, hours, or scrap move. The number on the proposal is the number operations expect to make.

The margin you thought you sold is not the margin you made. On a busy week that gap is not one order. It is every order priced from the same stale roll.

A cheap formula on a line that is already sold out is not a cheap order. The quote did not include the calendar. You pay in overtime, a late shipment, or a job you should have passed.

Change orders and substitutions that are built and never priced do the same thing on a job. The original estimate stays on the proposal. The cost of the extra work lands in the bank.

Fixing it later means a credit, a tense conversation, or a silent decision to “make it up on the next one.” The next one is priced from the same old cost.

Make the quote and the batch or job read the same formula, estimate, or bid. When an ingredient price, a yield, a scrap rate, or a labor hour changes, the next quote changes with it.

Include the yield the plant actually gets, not only the theoretical quantity on the spec. Include labor and overhead where the estimate already claims to. A material-only number is not the cost of the job.

When the work closes, compare actual consumption or actual hours with the cost that won the order. The comparison is useless if it happens only after the price can no longer move, so keep it on the open record too.

Do not add a monthly costing meeting as the fix. The fix is that sales does not keep a private copy of the cost.

MFGMAX prices a batch from the recipe, current ingredient cost, and the yield the plant actually gets. On a job, the estimate is built from materials, labor, and overhead and compared with what was recorded while the job is open.

Actual cost stays on that batch or job so the next quote is not the last guess. The copilot can be asked where actual cost is above the standard or the estimate, because that difference is on the record.

Accounting can stay in QuickBooks. MFGMAX holds the batch, the job, the lots, and the true cost, then posts to the books. Your accountant still closes the books.

The quote and the work have to read the same cost. On a formula that means today’s ingredient price and the yield the plant actually gets, not the roll from the last quiet afternoon. On a job it means materials, hours, and the changes that were built. A substitution the floor already approved has to be the substitution sales prices. Comparing actual with the number that won the order is useful only while the price can still change, and again when the next quote is written. A monthly costing meeting does not fix a private copy of the cost.