What financial reports do contractors need to review regularly?
Job cost reports are the most important financial report for any contractor. They show whether individual projects are profitable, how actual costs compare to your estimates, and where you’re losing money. Review these weekly on active jobs. Waiting for monthly reviews means catching problems after the job is done and the money is already gone.
A profit and loss statement shows how your business performed over a period. Revenue minus expenses equals profit. For contractors, the monthly P&L reveals patterns like rising material costs, labor inefficiency, or overhead creeping up. Compare month over month and year over year to spot trends before they become problems.
Cash flow projections matter more for contractors than most businesses. You might show a profit on paper while running out of cash because you’ve bought materials for three jobs but only collected on one. A cash flow forecast shows money coming in and going out over the next few weeks. Review weekly when jobs are active so you know whether you can cover payroll and supplier invoices.
Accounts receivable aging tells you who owes you money and how long they’ve owed it. Sort by 30, 60, 90+ days overdue. The older a receivable gets, the less likely you’ll collect. A profitable job isn’t profitable if you never get paid. Review weekly and follow up immediately on anything past 30 days.
Accounts payable aging shows what you owe suppliers and subcontractors. This helps with cash planning and prevents damaged relationships with vendors you depend on. Review weekly to avoid late fees and keep your credit lines healthy with suppliers.
A balance sheet shows your overall financial position at a point in time. Assets, liabilities, equity. Review monthly or quarterly. It tells you things the P&L doesn’t, like whether you’re accumulating debt, whether retained earnings are growing, and whether you could handle a slow season without borrowing.
Work in progress reports matter if you have larger projects spanning multiple months. They compare costs incurred to billings sent on each job. Overbilling means you’ve collected more than you’ve earned, which creates problems down the road. Underbilling means you’re financing the project out of your own pocket.
Most contractors run their business on gut feel because their project cost tracking isn’t set up correctly. They know they’re busy but can’t tell which jobs actually made money. Getting these reports built and reviewing them on a regular schedule changes how you bid, how you manage projects, and whether you keep the profit you thought you earned.
If your books don’t produce useful reports right now, a Richmond bookkeeper familiar with construction accounting can set up the tracking you need. The reports themselves aren’t complicated. The discipline to review them regularly and act on what they show is what separates contractors who grow from those who stay stuck wondering where the money went.
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More Questions
My Last Bookkeeper Left My Books in Bad Shape. Can You Fix Them?
Yes. Cleaning up after a previous bookkeeper is a significant part of what we do. Misclassified transactions, unreconciled accounts, missing records. We sort it out and get you back to accurate books.
Read answerWhat's the best way to track costs for each project?
The best approach is capturing every cost as it happens and assigning it to the right project in your accounting system. This means tracking labor hours, materials, subcontractor bills, and direct expenses separately for each job so you know your actual profit margin on every project.
Read answerHow do I file quarterly estimated taxes in Virginia?
Virginia estimated taxes are due April 15, June 15, September 15, and January 15 if you expect to owe $150 or more. Pay online through Virginia Tax's iFile system or mail Form 760-ES with a check.
Read answerHow Do I Set Up Job Costing for My Construction Business?
Track every cost against the job it belongs to. Labor hours, materials, subs, equipment. Compare what you bid against what you spent. Without this, you won't know which jobs make money until it's too late to do anything about it.
Read answerHow do I prepare my books before applying for a business loan?
Lenders want clean, reconciled financial statements that tell a consistent story. Before applying, reconcile all accounts, prepare accurate P&L and balance sheet statements, and make sure your books match your tax returns.
Read answerDo I need to send 1099s to all my subcontractors?
Not every subcontractor needs a 1099. The $600 threshold, corporate status, and payment method all determine who gets one. Collect W-9s from subs before paying them so you have the information you need at tax time.
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