What monthly financial reports should a contractor receive?

1. A profit and loss statement with context

Your profit and loss statement shows income and expenses over a period. Ask to see the current month and year to date, with a useful comparison such as the prior year or budget when available.

For a contractor, materials, field labor, and subcontractors often deserve separate attention. Consistent categories help you ask better questions: Did material costs rise? Did a larger share of work go to subcontractors? Did overhead increase faster than sales?

Confirm whether the reports use cash, accrual, or another agreed accounting basis. The timing of customer payments and supplier bills can change what a single month appears to show.

2. A balance sheet you can explain

The balance sheet shows recorded assets, liabilities, and owner’s equity at a particular date. Review cash, equipment, credit cards, loans, and owner activity. Receivables and payables may also appear, depending on your accounting basis.

Ask about balances that look unusual or have not changed as expected. A loan balance that does not agree with its supporting records, for example, needs investigation before you rely on the numbers.

3. An explanation of what happened to cash

Profit and the change in your bank balance measure different things. Borrowing money increases cash without creating sales. Paying loan principal reduces cash without being an operating expense. Equipment purchases and owner distributions also need to be understood separately.

A useful monthly conversation connects the reports to those movements. Ask what caused cash to change and which known payments are approaching. A formal cash-flow statement or a forward-looking cash forecast can be added when appropriate to your needs and engagement.

4. Job-level detail, when the records support it

If you want to understand individual jobs, your team needs a consistent way to identify the job associated with materials, subcontractors, and labor. Agree on what gets assigned directly and how shared costs are handled.

For work still underway, consider billing timing, costs already incurred, and the work remaining before interpreting a reported margin. A report built from incomplete job coding can create false confidence. Job-cost reporting and work-in-progress analysis should be scoped specifically; they are not automatic features of a basic monthly bookkeeping engagement.

5. A dependable month-end handoff

Reports are more useful when the underlying records arrive consistently. Agree with your CPA on a monthly document deadline and the information your business will provide.

• Bank, credit card, and loan statements.
• Payroll reports and details of unusual transactions.
• Equipment purchase, sale, and financing documents.
• Receipts and invoices that explain business purchases.
• Job coding, receivable, or payable records when included in your reporting scope.

Keep the supporting documents alongside your bookkeeping records. The IRS’s guide to business records describes the documents that support transactions and asset purchases.

Turn the reports into a conversation.

At the end of your monthly review, you should be able to answer three questions: What changed? What still needs clarification? What should we address before next month?

Collins CPA combines monthly bookkeeping with business and owner tax work and year-round planning. We agree on the reports and responsibilities that fit your business. Your team continues to handle day-to-day invoicing, collections, and bill payments.

Explore our construction accounting services or accounting for HVAC businesses, or tell Regan about your business.