Steel coil isn’t just another line item—it’s the lifeblood of your revenue stream. But if you’re not reconciling coil cost correctly, you might be working with misleading margin reports that can steer your business decisions in the wrong direction. For controllers, getting this right isn’t just about accounting accuracy—it’s about protecting profit.
Too often, steel operations rely on standard costing, outdated averages, or disconnected systems that create a false sense of profitability. By the time the truth surfaces—when actuals are finally reconciled—decisions have already been made. Jobs have been quoted. Resources have been allocated. And profits have quietly disappeared.
The Real Problem Behind “Good” Margin Reports
You know the drill. A job closes. The ERP spits out a margin report. It looks good—on paper. But weeks later, when you compare material receipts, usage, and revenue, the numbers don’t line up.
Why? Because:
Coil was issued from inventory at an outdated standard cost
Material usage was estimated, not tracked precisely
Offcuts or scrap weren’t properly allocated
Inventory adjustments or revaluations weren’t factored in
Each of these discrepancies might seem small, but together they distort the real margin. Multiply that across hundreds of jobs, and you’ve got a serious blind spot.
Controllers Are the Last Line of Margin Defense
In this environment, controllers aren’t just financial overseers—they’re detectives. Their job is to interrogate the numbers, trace discrepancies, and ensure what’s being reported reflects reality. And that starts with better reconciliation between actual coil costs and job-level revenue.
This means tracking:
Coil purchase prices (including freight, surcharges, and handling)
Inventory valuation changes
Coil-to-job usage down to the individual roll
Scrap generation and its financial treatment
Job-specific adjustments for yield, waste, or change orders
If your systems aren’t capturing this detail, your margin reports are little more than educated guesses.
The Disconnect Between Sales and Finance
Controllers also have to bridge a crucial communication gap. Sales teams often quote jobs using rough cost assumptions or outdated material prices. That’s fine when markets are stable—but steel prices are rarely predictable.
If coil costs jump 20% between quote and production, who catches that? Too often, no one does—until it shows up as negative margin. Controllers can help build checks into the quoting and order review process to prevent this:
Require real-time cost validation before order entry
Set margin threshold alerts
Use rolling averages or actual landed cost when available
Use Technology to Close the Gap
Modern ERP and costing systems can now track coil consumption and revenue at a granular level—per job, per customer, even per SKU. Controllers should take full advantage of this visibility to:
Compare planned vs. actual material usage
Monitor job margins dynamically
Flag anomalies or cost spikes before jobs close
Provide feedback loops to improve quoting accuracy
Business intelligence dashboards can then turn this data into actionable insight for operations, sales, and leadership.
Clean Data Is Profitable Data
Of course, none of this works if your data is unreliable. Controllers must champion data hygiene:
Ensure accurate receiving and inventory tagging
Close WIP promptly
Audit scrap reporting and yield loss regularly
Maintain tight version control over BOMs and routing
Sloppy data leads to sloppy margins. And in a steel operation, every decimal matters.
Final Thought: Precision Beats Perception
When margins look good but actual profit doesn’t show up, the problem is almost always in the details. And it’s usually tied to how well—or how poorly—coil costs are reconciled to job revenue.
Controllers who focus on tightening this link don’t just improve reports—they protect profitability. They give leadership better decision-making tools. And they ensure that every job is contributing what it should to the bottom line.
Because in steel, perception is dangerous. Precision is power.
