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
What's the best way to track project profitability?
Break projects into labor, materials, and outside costs. Track every expense against the specific job. Compare budget to actual weekly so you catch problems while you can still fix them.
Read answerWhat's the best way to track business expenses?
The best expense tracking system is one you'll actually use consistently. Separate business and personal finances, capture receipts immediately, and reconcile weekly instead of waiting until month-end.
Read answerWhat financial reports should I be reviewing every month?
Start with the profit and loss statement, balance sheet, and cash flow statement. Add accounts receivable and payable aging reports to track money coming in and going out. Monthly review catches problems while they're still small.
Read answerHow do I handle sales from third-party delivery apps like DoorDash and Uber Eats?
Record the full sale amount as revenue and the platform's commission as a separate expense. The deposit will be the net amount, but your books will show true sales and actual delivery costs.
Read answerWhy aren't my bank transactions importing correctly into QuickBooks?
Bank feed issues usually come from broken connections, duplicate handling, or account matching problems. The fix depends on whether transactions aren't showing up at all, appearing twice, or landing in the wrong place.
Read answerWhat's the difference between catch-up bookkeeping and cleanup bookkeeping?
Catch-up bookkeeping addresses a time gap when your books stopped being maintained. Cleanup bookkeeping fixes quality issues like miscategorized transactions and accounts that don't reconcile. Many businesses need both.
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