THE NUMBERS TO TRACK EVERY MONTH.
A subcontractor should track eight numbers monthly on a 13-month rolling view: revenue, gross margin, overhead rate, net margin, working capital, current ratio, days sales outstanding, and backlog. The Construction CFO calls this the CEO report. Thirteen months lets you average the last twelve and see whether each number is trending up or down.
Most subcontractors check the bank balance and call it a dashboard. The bank balance is a result, not a leading indicator, and by the time it moves the cause is months old. A real financial dashboard tracks the numbers that predict where the business is heading: margin, overhead, net profit, the balance sheet ratios, and backlog, on a rolling 13-month view so you can compare this month to the same month last year and see the trend. The Construction CFO calls this the CEO report. This page lists the numbers that belong on it, what each one tells you, and why 13 months is the right window.
TRACK LEADING INDICATORS.
A dashboard exists to show you what is coming, not what already happened. The bank balance, last month’s profit, a single job’s result, those are lagging. They tell you where you have been. The numbers that matter are the ones that move before the bank balance does: margin trends, overhead creep, backlog quality.
Track them on a 13-month rolling view. Thirteen months lets you average the trailing twelve and compare this month to the same month a year ago, so seasonal swings do not fool you and a real trend stands out.
WHAT BELONGS ON THE DASHBOARD.
The income statement trio.
Revenue is the multiplier; it tells you how fast you grow or fail. Gross margin is the foundation: revenue minus direct cost, the money that covers overhead. Net margin is the only number that says the business works, what is left after every expense. Watch all three as a trend, because a rising revenue with a falling margin is a warning, not a win.
The number that goes straight into your bids.
Overhead is the cost to keep the business open divided by revenue, and it moves every month with how busy you are. A slow month spikes the percentage; a busy one drops it. Tracked on a rolling twelve-month average, it tells you whether you are getting more efficient or less, and it feeds directly into how you price work.
Can the business carry its own weight.
Working capital is current assets minus current liabilities, the cash you have to operate after near-term obligations, and it sets your bonding capacity. The current ratio is current assets divided by current liabilities; above 1.3 is healthy, below 1.0 is a liquidity warning. These are the balance-sheet numbers lenders read.
How fast you collect, and what is coming.
Days sales outstanding measures how long your money sits as receivables; rising DSO means collections are slipping. Backlog is the signed work ahead of you, and its quality, margin and payment terms, matters as much as its size. A big backlog of thin-margin work is a problem disguised as good news.
CLOSE BY THE TENTH, REVIEW MONTHLY.
The dashboard is only as good as the books behind it. Close the books and reconcile the bank by the tenth of the month, or the numbers you are reading are wrong: double entries, unapproved costs, a cash position that does not reflect reality. The tenth is non-negotiable.
Then review the dashboard monthly, alongside a cost-to-complete on every active job. Billion-dollar contractors do this on a fixed day every month. The review surfaces problems while leadership can still solve them, instead of at closeout when the job is done.
MEASURE WHAT MOVES FIRST.
A subcontractor who tracks these eight numbers monthly sees trouble building weeks before it reaches the bank account, and sees opportunity early enough to act on it. That visibility is the difference between running the business and reacting to it.
The Construction CFO produces this dashboard, the CEO report, every month as part of CFOS for subcontractors doing $1M to $12M, on a 13-month rolling view.
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