Financial KPIs Every Builder Must Track: A Dashboard Approach

Most builders know how much cash is in the bank — but beyond that, the financial picture often gets fuzzy. Yet in construction, tight margins, changing costs, and complex projects make accurate tracking essential.

If you're not watching the right KPIs (Key Performance Indicators), you may be missing early signs of cash flow issues, unprofitable jobs, or overspending. The good news? You don’t need a finance degree to build a simple but powerful dashboard.

Why KPIs Matter in Construction

Construction is dynamic. Materials fluctuate, subs shift timelines, and payments arrive in waves. Gut instincts aren’t enough. You need hard numbers to:

• Detect profit leaks

• Forecast cash needs

• Justify pricing changes

• Guide smarter decisions across your team

The 5–7 KPIs Every Builder Should Monitor

These KPIs apply to general contractors, remodelers, and specialty subs alike.

1. Gross Profit Margin (%)

Shows how efficiently you’re turning revenue into jobsite profit (before overhead).

Formula:
(Revenue - Cost of Goods Sold) ÷ Revenue

Target: 15–25% depending on project type and scope

2. Net Profit Margin (%)

What’s left after overhead, payroll, insurance, and admin. Your real take-home margin.

Formula:
Net Income ÷ Revenue

Target: 8–12% for a healthy, growing company

3. Cash Flow Forecast

Predicts how much cash you’ll have in 30, 60, or 90 days based on invoicing and expenses.

Track:

• Upcoming receivables

• Projected expenses (payroll, materials, insurance)

• Available credit

Helpful tool: Use Excel or a tool like Knowify to create weekly cash flow snapshots.

4. Accounts Receivable Aging

Breaks down how long your invoices have gone unpaid (0–30, 31–60, 61–90+ days).

Why it matters:

• A high percentage in the 60+ column = cash risk

• Older AR may never get collected

Tip: Follow up consistently and set payment terms that discourage delays.

5. Job Cost Variance

Compares estimated vs. actual costs for each project.

Formula:
(Actual Cost - Estimated Cost) ÷ Estimated Cost

Even 5% overruns across multiple jobs can crush profit margins — track this monthly.

6. Overhead Ratio

How much of your revenue is going toward fixed costs (admin, rent, insurance, etc.).

Formula:
Total Overhead ÷ Revenue

Helps you spot admin bloat and make growth decisions. Keep overhead lean as you scale.

7. Backlog Coverage (Months of Work Booked)

How far ahead are you booked with signed contracts?

Formula:
Total Value of Backlogged Work ÷ Monthly Revenue Run Rate

Builders should aim for 3–6 months of backlog, depending on crew size and project duration.

Build a Simple KPI Dashboard (No Fancy Software Needed)

Here’s how to set up your own:

• Step 1: Open a spreadsheet with 12 monthly columns

• Step 2: Create rows for the 5–7 KPIs listed above

• Step 3: Update each row monthly with actual numbers

• Step 4: Use conditional formatting to flag KPIs out of range (e.g., red if gross margin < 15%)

• Step 5: Review it every month with your team or accountant

Optional Add-Ons:

• Labor productivity per job

• Equipment utilization rate

• Marketing cost per lead or per signed contract

Final Thought

Tracking your numbers isn’t just about compliance or tax time — it’s about building a resilient, profitable construction company. When you watch the right KPIs consistently, your decisions become faster, smarter, and more aligned with your goals.

At CMS, we’re committed to helping builders win — not just on the jobsite, but in the back office. Better materials, better margins, better decisions.

Need a supplier who helps you protect your margins and stay on schedule?
📞 Contact Construction Material Specialists in Grand Rapids to get pricing visibility, inventory control, and a team that understands your financial priorities.