When Managers Aren’t Accountable to the Numbers, Profit Always Suffers

Introduction

One of the biggest myths in growing construction and engineering businesses is that profit problems are caused by poor sales. In reality, we see the opposite far more often. Sales grow, work is busy, teams are stretched, yet profit quietly falls behind expectations.

At Jones Financial Accounts (JFA), this usually points to one core issue: managers are not accountable to the numbers.

When budgets, margins, and costs do not clearly belong to anyone, inefficiencies hide in plain sight. Overspending is explained away, poor decisions repeat, and leadership teams are left guessing where profit has gone.

This blog explains why unclear ownership damages profitability, why it affects SMEs just as much as large businesses, and how assigning financial responsibility improves both performance and culture, especially in construction and engineering.

When Managers Aren’t Accountable to the Numbers, Profit Always Suffers

Every manager makes financial decisions, whether they see themselves as “financial” or not. In construction and engineering, decisions around labour allocation, subcontractors, materials, rework, and scheduling all directly impact profit.

The problem arises when:

• No one owns a budget

• No one reviews margin by job or department

• No one is challenged on overspends

  
  

When this happens, costs drift. Not dramatically at first, just enough to erode margin month by month. Because no single person owns the outcome, issues are blamed on “the project”, “the client”, or “the market”.

Profit does not disappear overnight. It leaks slowly through unmanaged decisions.

Why This Happens in Growing Businesses

Most businesses do not set out to avoid accountability. It usually happens during growth.

A business starts small. Everyone helps everywhere. Decisions are made quickly. That works at £250k or £500k turnover.

As the business grows:

• Teams expand

• Roles overlap

• Managers focus on delivery, not cost

  
  

Without structure, people continue operating as they always have, but the financial impact is now much larger.

A decision that once cost £500 now costs £5,000. Without ownership, no one feels responsible for the outcome.

This is why accountability to the numbers is not about blame. It is about clarity.

What Financial Accountability Actually Means

Financial accountability does not mean turning managers into accountants.

It means:

• Each manager understands what they are responsible for

• They know what “good” looks like financially

• Results are reviewed regularly and calmly

  
  

In practical terms for construction businesses, this usually means:

• A site manager/Qs understands their job margin

• A department lead knows their labour budget

• Variations are reviewed against profit impact, not just scope

  
  

When managers can see the numbers, they make better decisions.

Why This Matters More in Construction and Engineering

Construction businesses operate on thin margins with high risk. A few poor decisions can wipe out months of profit.

Common examples we see:

• Labour overruns justified as “getting the job done”

• Subcontractor costs approved without margin review

• Materials ordered early “just in case”, tying up cash

  
  

Without accountability, these decisions repeat. With accountability, behaviour changes quickly.

This is why management accounts and clear reporting matter. I

Accountability in Action

We worked with an engineering business turning over approximately £3m. Senior managers were experienced and hardworking, but no one owned departmental results.

Once financial accountability was introduced:

• Each manager received a simple monthly cost and margin report

• Budgets were agreed in advance

• Monthly review meetings focused on explanations, not excuses

Within six months:

• Waste reduced

• Variations were priced more accurately

• EBITDA improved by 5%, worth nearly £150,000 per year

Just as importantly, culture improved. Managers felt trusted, informed, and in control, not policed.

Common Myths That Damage Accountability

“Finance will tell us if there’s a problem.” Finance reports what happened. Accountability changes what happens next.

“Managers don’t need to see the numbers.” People manage what they can see.

“Holding people accountable damages morale.” Unclear expectations damage morale far more.

How to Introduce Accountability Without Resistance

This is where many businesses go wrong. Accountability fails when it feels sudden or punitive.

A better approach:

1. Start with clarity, what does each role own?

2. Share simple financial reports, not complex spreadsheets

3. Review results monthly, calmly, and consistently

4. Focus on learning, not blame

Tools that support this include:

• Simple budget vs actual reports

• Job-level margin tracking

• Departmental summaries

You can support this with free tools available here:https://www.jonesfa.co.uk/resources

The CFO Perspective: Why This Protects Directors

From a director’s point of view, financial accountability is a form of risk management.

When managers own their numbers:

• Problems surface earlier

• Decisions are better informed

• Directors are not the bottleneck for every approval

This allows leadership teams to focus on growth.

Key Takeaways

• Profit leaks when no one owns the numbers

• Accountability is about clarity, not blame

• Construction businesses feel cost mistakes faster

• Simple ownership improves both results and culture

If your business is busy but profit feels harder to control, unclear financial ownership is often the cause. JFA helps construction and engineering businesses put simple accountability structures in place that protect margin without slowing delivery.

Wrapping up today's insights, tomorrow we simplify another accounting challenge.