7 Common Reasons Construction Margins Are So Thin (and How Outpave Fixes Them)

As a contractor, you’re probably booked solid for the next several months. But being busy doesn’t always mean being profitable. Across the construction industry, many contractors are working nonstop while still struggling with razor-thin margins.

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In most cases, it’s not labor or material costs alone that are shrinking the margin. It’s poor expense management. Small, unmanaged job-site expenses quietly pile up, overrun budgets, and erase profits before anyone realizes there’s a problem.

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Here are seven of the most common expense management mistakes that chip away at the margins, and how Outpave’s expense management helps contractors regain control.

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Reason #1: Job-Site Expenses Are Not Captured

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Crews make daily purchases, such as fuel, materials, tools, and last-minute supplies, to keep projects moving. When receipts are lost or expenses aren’t logged, those costs never get tied back to the job.

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The result is a budget that looks healthy on paper, until accounting closes the books and all the missing expenses surface at once.

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Outpave’s Solution
Outpave allows crew members to capture job-site expenses in the app on their phone, automatically attaching purchases to the correct job so nothing gets missed.

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Outpave prevents uncaptured job expenses from quietly eroding construction margins.

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Reason #2: Expenses Are Reported Too Late

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With traditional expense management systems, even when expenses are submitted, they often arrive weeks after the purchase. By then, the job is finished and there’s no opportunity to adjust spending or protect the margin.

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Delayed visibility makes proactive cost control impossible.

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Outpave’s Solution
Outpave provides real-time expense tracking, giving contractors instant visibility into job costs as spending happens.

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Outpave enables real-time cost visibility before thin construction margins are lost.

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Reason #3: Reimbursements Hide True Job Costs

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Relying on reimbursements creates friction for crews and delays for accounting. More importantly, reimbursed expenses are often misclassified as overhead instead of job costs.

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This makes projects appear more profitable than they really are and leads to inaccurate estimating on future jobs.

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Outpave’s Solution
Outpave eliminates the need for reimbursements by providing company cards with specific spending controls. If an employee needs access to funds right away, a virtual card can be activated immediately.

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Outpave replaces reimbursements with accurate job-level expense tracking.

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Reason #4: No Spend Controls in the Field

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Without spending limits, crews can buy from any vendor, at any time, for any reason. While individual purchases seem minor, uncontrolled spending across multiple jobs adds up fast.

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When there are no controls, budgets stop being meaningful.

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Outpave’s Solution
Outpave allows contractors to set job-specific spend limits, vendor rules, and category controls for every single card issued. So you can stop the spend before it happens.

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Outpave enforces spend controls that protect construction budgets and margins.

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Reason #5: Expenses Are Poorly Categorized

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When expenses are dumped into generic categories, contractors lose insight into where money is actually going. This makes it difficult to identify waste, optimize vendors, or improve future bids.

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Bad categorization leads directly to repeated margin problems.

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Outpave’s Solution
Outpave’s expense management platform is fully customizable. So you can create the spending categories that make sense for your business. There is no limit to categories, so you can be as detailed as possible, making job cost-coding easier than ever.

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Outpave improves job costing by capturing clean, categorized expense data.

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Reason #6: Accounting Software Can’t Manage Job-Site Spending

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Traditional accounting software is built to record expenses after the fact—not to control spending in the field. Crews don’t use accounting tools, which creates a disconnect between spending and oversight.

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By the time costs appear in accounting reports, it’s already too late to fix the problem.

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Outpave’s Solution
Outpave works alongside accounting software to manage job-site spending in real time, then syncs clean data back to accounting.

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Outpave fills the gap accounting software leaves in construction expense management.

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Reason #7: No Clear Ownership of Expense Management

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In many construction companies, expense tracking is “everyone’s responsibility,” which means it’s inconsistently done. Without a clear system, accountability breaks down and margins suffer.

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Outpave’s Solution:
Outpave creates a consistent, centralized expense management process across all crews and jobs.

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Outpave creates accountability and consistency in construction expense management.

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Protect Your Margins: Track Every Expense with Outpave

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Thin construction margins don’t have to be accepted as the norm of the industry. Understanding how expense management impacts your project budgets (and therefore your margins) can empower you to stop the bleed in your profits.

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Outpave’s expense management gives contractors real-time control over job-site spending, helping protect budgets and improve margins on every project.

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