There are three reports every trades business should look at monthly, plus a couple more that can make a real difference in how you price work and manage cash.

The profit and loss statement is the most important one. It shows your revenue, direct costs like materials and labor, and your overhead expenses. For electricians, plumbers, HVAC techs, and other trades, the number to watch is gross profit margin. That’s what’s left after you subtract the direct cost of doing the work from what you charged. If materials and labor are eating 75% to 80% of revenue, you don’t have much room left for truck payments, insurance, tools, marketing, and your own pay. Reviewing this monthly lets you catch margin compression before it becomes a real problem.

The balance sheet tells you the overall financial position of the business. What you own, what you owe, and what’s left as equity. Most trades owners skip this report, but it matters. It shows whether debt is creeping up, how much cash you actually have versus what’s tied up in receivables, and whether the business is building value over time or just spinning its wheels.

Cash flow might be the single biggest stress point for trades businesses. You buy materials upfront, pay your crew weekly, and then wait 30 to 60 days for the customer or general contractor to pay. The profit and loss can look great while your bank account tells a different story. A cash flow statement or even a simple cash position report each month keeps you from getting blindsided.

Accounts receivable aging is critical if you invoice customers rather than collecting at the time of service. This report shows who owes you money and how long each invoice has been sitting. Anything past 60 days needs immediate follow-up. The longer it goes, the harder it is to collect. A quick monthly review of this report can save you thousands in write-offs over the course of a year.

If you track work by job, a job profitability report rounds out the picture. It shows which jobs made money and which ones didn’t. Over time, patterns emerge. Maybe residential service calls are your best margin work while new construction bids are barely breaking even. You can’t adjust your pricing or focus your sales efforts without this data.

The reports themselves aren’t complicated. What matters is having them produced accurately and actually sitting down to review them. A small business accounting firm that understands trades work can deliver these reports in a format that makes sense and help you understand what the numbers are telling you about your business each month.