Project-wise profitability answers one question: is this specific development making money, and how much. Most developers cannot answer it without a week of work, because the costs arrive in different systems — land in a legal file, construction in site records, sales cost in a commission spreadsheet, overhead nowhere at all. The report is not hard arithmetic. It is an allocation problem.
The structure
| Line | Includes | Where it usually goes missing |
|---|---|---|
| Revenue | Net realised value of sold units, after discount | Discounts recorded only on paper |
| Land cost | Consideration, stamp duty, registration, mutation, legal, broker | Fragments booked to head office |
| Landowner share (JV) | Value of units surrendered to the landowner | Treated as revenue and cost simultaneously |
| Construction cost | Certified contractor bills, materials, site salaries, utilities | Materials bought for two sites, booked to one |
| Approval and compliance | RAJUK and utility fees, consultants, statutory costs | Booked as general administrative expense |
| Sales and marketing | Advertising, broker commission, sales salaries | Commission accrued but not recognised until paid |
| Finance cost | Interest on project borrowing | Held at company level |
| Overhead allocation | Head office share, by stated rule | No rule exists |
The two lines that most often break the number are landowner share and overhead. Both are treatable — see joint venture landowner share for the first.
Budget versus actual, not just actual
An actual-cost report tells you what happened. It does not tell you whether it should have. The useful format has four columns per line: original budget, revised budget, actual to date, and forecast to complete. The fourth is the one that predicts trouble, and it is the one most systems do not carry, because it requires someone to make a judgement each month rather than run a query.
Timing: revenue recognition versus cash
A developer's profit and its bank balance move on completely different schedules. Revenue may be recognised on a percentage-of-completion basis while cash arrives on a kisti schedule that runs two years longer. Both views are needed, and confusing them causes two classic errors: declaring a dividend out of collections that are really buyer advances, and panicking about a cash gap on a profitable project. Developer cash flow covers the second view.
The unit-level check
A project margin is an average, and averages hide the interesting part. The same report at unit level shows which categories are actually earning: corner units at a premium, ground floor sold at a discount, the four units given away as part of a supplier settlement. Developers who look at unit-level margin usually change their next price list.
What the system must connect
For this report to be produced in minutes rather than weeks, four connections have to exist:
- Discounts flow from booking to revenue, so revenue is net rather than list.
- Land costs attach to plots, and plots attach to projects. See land acquisition records.
- Contractor bills attach to certified progress on a specific project. See certifying a contractor bill.
- Commission accrues against the booking that generated it, not the month it was paid.
What to do next
Ask for a project-wise profit statement for your oldest live project with the four columns above. Time how long it takes to arrive. If it is more than a day, the number you are managing by is a month old and blended — see how project costs and revenue stay attached to the project.