The hidden cost of project delays
Take an eighteen-month project that runs to thirty months.
That’s another twelve months of work to carry.
Why delays destroy margins
Preliminary costs.
These are the expenses that keep accumulating regardless of progress:
- Site supervision
- Temporary facilities
- Equipment rentals
- Compliance costs
- Insurance
- Administration
Every day a project runs overtime, these costs continue to drain your margins while your team remains stuck instead of moving to the next job.
The brutal math
- Project prelims estimated at $15K/month × 18 months = $270K
- Actual timeline: 30 months
- Actual prelim costs: $450K
- Silent profit erosion: $180K
The most dangerous part
This contractor was showing a “profit” in their accounting system because these overruns were not properly allocated to the specific project causing them.
This created a blind spot where they could not see which projects were truly profitable and which were bleeding them dry.
Why visibility changes everything
One of our goals at Contractable was to eliminate this problem by making preliminary costs transparent and trackable in real time.
When you can see exactly how delays impact your bottom line on a weekly basis, you make different decisions.
You prioritise getting unstuck and moving forward.
Most importantly, you learn which preliminary costs tend to be underestimated in your business, improving every future estimate you create.
A simple question
What has been your experience with preliminary costs?
Are they accurately reflected in your project budgets?