5 Financial Metrics Every Contractor Should Track Weekly

I've reviewed hundreds of contractor financials over the past two decades, and I can usually spot a company in trouble within five minutes. It's not because their P&L looks bad—that's a lagging indicator. The real warning signs show up in metrics most contractors never look at until it's too late.

Here are the five metrics I track weekly with every client. Master these, and you'll catch problems while they're still small enough to fix.

1. Net Over/Under Billing Position: Your WIP Health at a Glance

Your net over/under billing position is the single most important number in construction finance. It's the difference between what you've billed customers and what you've actually earned across all active jobs.

What good looks like: A slight overbilled position (5-10% of total contract value). You're billing ahead of costs, which means positive cash flow and healthy job performance.

What bad looks like: Underbilled by more than 15%. Either you're not billing aggressively enough, or jobs are running over budget and you haven't recognized the loss yet. I recently worked with a $20M GC who was underbilled by $800K across their portfolio. Turns out three jobs were hemorrhaging margin and nobody had updated the cost-to-complete estimates in four months.

How to track it: Run your WIP schedule every week. Not monthly—weekly. Add up all overbillings, subtract all underbillings. Watch the trend. If your net position is deteriorating week-over-week, you have active margin fade and need to find it fast.

2. Backlog-to-Revenue Ratio: Your Future Pipeline

Your backlog is all the work you've won but haven't completed yet. The backlog-to-revenue ratio tells you how many months of work you have lined up based on your current revenue run rate.

What good looks like: 1.0 to 1.5x annual revenue. For a $15M contractor, that's $15M-$22M in backlog. You have 12-18 months of work ahead, enough to keep crews busy but not so much you're overcommitted.

What bad looks like: Below 0.8x, you'll have idle capacity within 9 months. Above 2.0x, you're probably overextended and either your project timelines are slipping or you're taking on more work than you can properly manage.

I worked with a commercial sub who hit 2.4x backlog-to-revenue. Looked great on paper. Six months later they were bleeding cash because they couldn't staff the work, jobs were running late, and they were paying overtime premiums that destroyed their margins. The backlog ratio gave us the early warning—we just didn't listen.

How to track it: Every month, divide your backlog by your last 12 months of revenue. Watch for rapid changes. A ratio that jumps from 1.2 to 1.8 in one quarter means you probably just landed a couple big jobs and need to plan your capacity carefully.

3. Gross Margin by Job: Where Problems Actually Hide

Most contractors track gross margin at the company level. That number is almost useless. You need to know margin by job, updated weekly.

What good looks like: Consistent margins close to your estimate. If you bid jobs at 18% gross margin, your WIP should show most active jobs between 16-20%. Consistency means your estimating is accurate and your PMs are executing well.

What bad looks like: Wide variance. Three jobs at 25%, two jobs at 8%, one job at -5%. Your company-wide margin might look fine at 15%, but you've got active disasters you're not addressing.

I've seen this pattern a hundred times: a contractor has 10 active jobs, nine are performing at 18% margin, one is at -12%. The company average is still 14%, so nobody panics. Meanwhile that one job is losing $200K and getting worse every week.

How to track it: Your WIP schedule should show current margin for every job. Sort by margin, lowest to highest. Anything below your target gets a weekly review. Any job that's dropped 5+ margin points in a month gets an immediate deep dive.

4. 13-Week Cash Flow Forecast: When Will You Run Out?

Cash flow forecasting is where I see the biggest gap between what contractors should do and what they actually do. Most wait until they're in trouble, then scramble.

What good looks like: You know exactly how much cash you'll have 13 weeks from now, assuming normal collection and payment patterns. You can see the tight weeks coming and plan for them. Your forecast is updated weekly and has been accurate within 10% for the past quarter.

What bad looks like: You don't have a forecast. Or you built one six months ago in Excel and never updated it. You manage cash by checking your bank balance every morning and hoping it's not zero.

A $12M GC called me in a panic last year. They were 60 days from running out of cash despite having $18M in backlog and "good margins." The problem wasn't profitability—it was timing. They had four jobs starting within 6 weeks (big material outlays, slow owner payments) and three jobs wrapping up (final retainage tied up for 90 days). The cash crunch was completely predictable, but nobody had modeled it.

How to track it: Build a rolling 13-week forecast. Week 1 should be nearly exact (you know what's clearing this week). Weeks 2-4 should be based on actual invoices and commitments. Weeks 5-13 are estimates based on job schedules and historical collection patterns. Update it every single week. Watch for valleys below your minimum cash reserve.

5. Labor Utilization Rate: Are You Making Money on Your People?

Labor utilization is the percentage of your labor hours that are actually billable. For most contractors, labor is your biggest cost and your biggest profit driver. If you're not tracking utilization, you're flying blind.

What good looks like: 75-85% utilization for field labor. That means out of every 40-hour week, 30-34 hours are charged to jobs. The rest is training, shop time, weather delays, and other non-billable time. For PMs and supers, 85-90% is realistic.

What bad looks like: Below 65%, you're paying for a lot of bench time. Above 90%, you're probably eating costs that should be billed to owners (change orders you didn't submit, rework you absorbed, etc.).

I worked with a mechanical sub running at 58% utilization. They wondered why they couldn't make money at their billing rates. Turns out they were carrying three extra foremen "just in case" and had a chronic problem with PMs not submitting change orders for scope creep. We got utilization to 78% without hiring or firing anyone—just better scheduling and change order discipline. Added $400K to their bottom line.

How to track it: Divide billable hours by total hours, by crew, by week. For a structured approach to workforce planning, see our Labor Capacity Planning Guide. Track trends. If utilization drops below 70% for more than two weeks, you either have a scheduling problem (not enough work) or a job problem (scope creep, rework, inefficiency).

The Real Takeaway

These five metrics aren't difficult to calculate. The hard part is building the discipline to actually track them weekly and act on what they tell you.

Most financial problems in construction don't appear overnight. They build over weeks and months, completely visible in these metrics, while contractors focus on last month's P&L and wait for their accountant to close the books.

Start with one metric. Pick the one that scares you most—that's probably where your biggest risk is. Track it every week for a month. You'll be shocked how much you learn about your business when you start looking forward instead of backward.