A bookkeeper produces a P&L and a balance sheet. A CFO produces all five and reviews them together. The relationship between them - when the P&L shows profit but the cash flow forecast shows a shortage, or when the WIP shows jobs trending to losses the P&L has not captured yet - is where the value of financial management lives.
The P&L (Profit and Loss Statement). Revenue, direct costs, gross margin, overhead, and net profit for the period. The P&L shows whether the business is profitable. It does not show cash position, timing, or job-level performance. Most owners check the P&L monthly. SPM reviews gross margin by job alongside the P&L so job performance is visible at the same time as business performance.
The Balance Sheet. Assets (what you own), liabilities (what you owe), and net worth (the difference) at a point in time. For construction subcontractors the key items are: retainage receivable, costs in excess of billings (underbilled), billings in excess of costs (overbilled), and net worth trend. The balance sheet shows the financial position of the business not its profitability.
The WIP Schedule. Every active job showing: contract value, estimated cost at completion, actual cost to date, percentage complete, revenue earned, amount billed, and overbilled or underbilled position. The WIP is the document that verifies whether the P&L is accurate. A profitable P&L with jobs trending to losses on the WIP tells you the P&L will look worse next quarter.
The 13-Week Cash Flow Forecast. Every cash outflow and inflow mapped 13 weeks forward by week. Shows when the bank account will be short before it happens. The most actionable of the five documents because it creates lead time to act on gaps rather than reacting after they occur.
The AR Aging Report. Every outstanding invoice by age: current, 30 days, 45 days, 60 days, 90+ days. Shows earned revenue that has not been collected. SPM calls every invoice over 30 days every Monday. The AR aging drives the collections call list and tracks whether collections are improving or deteriorating month over month.
