5 Reports Every Contractor Should Review Every Month

If you're a contractor, you probably don't need another report that tells you what happened six months ago.

You need financial information that helps you make decisions while there's still time to do something about it.

That's why monthly financial reporting matters.

Here are five reports we recommend contractors pay attention to.

1. Profit & Loss Statement

Your Profit & Loss tells you how much revenue you've generated, what you've spent, and whether the business is making money.

But don't just look at the bottom line.

Look at:

• Revenue compared with previous periods
• Gross profit
• Gross margin
• Labour costs
• Material costs
• Overhead
• Net profit

A monthly P&L can help you spot changes before they become major problems.

If revenue is up but your gross margin is falling, that's worth investigating.

If overhead has jumped 20%, you want to know why.

2. Accounts Receivable Aging

You can be profitable on paper and still be short on cash.

Why?

Because your customers haven't paid you yet.

Your A/R Aging shows how much money customers owe you and how long those invoices have been outstanding.

Look closely at invoices that are:

• 30 days overdue
• 60 days overdue
• 90+ days overdue

If a significant amount of your cash is sitting in unpaid invoices, that can create a serious cash-flow problem.

For contractors, this is especially important because you're often paying employees, suppliers, and subcontractors before the customer pays you.

3. Job Costing

This may be the most important report on the list for project-based businesses.

Job costing helps you compare what you expected a project to cost with what it is actually costing.

You can track things such as:

• labour
• materials
• subcontractors
• equipment
• other direct costs

The goal isn't just to see whether a completed job made money.

It's to identify problems while the job is still in progress.

If labour is already 80% used but you've only completed 60% of the work, that's information you need now—not at year-end.

4. Cash Flow Forecast

Your P&L tells you whether you're profitable.

Your bank account tells you how much cash you have today.

Your cash flow forecast helps you understand what is likely to happen next.

A simple forecast can show:

• expected customer payments
• payroll
• supplier payments
• loan payments
• upcoming large expenses
• projected cash balance

This can help you see a cash crunch coming before it arrives.

5. Balance Sheet

The Balance Sheet often gets ignored because it doesn't feel as intuitive as the P&L.

Don't ignore it.

Your Balance Sheet shows what the business owns, what it owes, and what's left for the owners.

Pay attention to things like:

• Accounts Receivable
• Accounts Payable
• GST/PST balances
• Loans
• Equipment
• Shareholder balances
• Retained earnings

Changes in these accounts can tell you things that your P&L doesn't.

Don't just look at the reports. Ask questions.

The real value isn't in printing five reports and filing them away.

It's in asking:

What changed?

Why did it change?

Is the change temporary or becoming a trend?

What do I need to do about it?

That's the difference between bookkeeping that records the past and financial reporting that helps you manage the future.

The takeaway

If you're running a growing contracting business, your financial reports shouldn't be something you see once a year when your accountant asks for them.

They should be part of how you run the business.

You don't need to become an accountant.

You just need the right numbers, consistently, and someone who can help you understand what they're telling you.