Margin fade is a job's projected margin sliding between locked closes. One close of fade is normal drift. The same job fading close after close is an estimating problem, and it's one of the fastest ways to lose a surety's confidence.
What fade actually is
Every close, ClearWIP recomputes each job's projected margin: gross profit as a percentage of the revised contract. Fade is that percentage dropping against the prior locked close; gain is it rising.
Margin rather than dollars is deliberate. A change order can lift a job's profit in dollars while the margin underneath it thins, and the margin is the part that tells you whether you priced the work right. Because closes are locked, the movement is provable: nobody can rewrite last month's estimate to make this month look flat.
Why sureties care so much
An underwriter reads fade as the answer to the only question that matters to them: can this contractor predict their own costs? Jobs that fade late, after 70 or 80 percent complete, say the answer is no, because the losses were sitting in the estimate for months while the schedule said everything was fine.
Catching it early
The fade/gain report lines up every job's margin against its first locked close, so drift shows up while the job is still young enough to fix: recover the change order, correct the estimate, or price the next bid differently.
Small fade caught at 40% complete is management. The same fade surfacing at 95% is a write-off, and a credibility problem on top of it.
Two baselines, deliberately: the Margin fade column on your WIP schedule always compares against last close, so it catches a bad month the moment it happens. This report compares against the job's first locked close, so it catches slow drift a month-to-month view can miss. Read them together.
When fade is honest
Fade you report the month it happens, with a revised estimate behind it, reads as control. What destroys trust is the other pattern: flat, flat, flat, cliff. Close monthly, let the estimate move when reality moves, and your fade history becomes evidence that your numbers can be believed.