The Quarterly Financial Review Every Trade Contractor Should Run

Most trade contractors receive their financial statements once a year—at tax time. By then, the numbers are eight to twelve months old and there is nothing you can do about them. A margin leak that started in March has been bleeding for nine months before you even see it in the February tax meeting.

The contractors who consistently grow revenue, maintain strong margins, and build real equity in their businesses do one thing differently: they review their numbers quarterly, with a structured agenda and clear action items. It is not a three-hour accounting lecture. It is a focused 90-minute session that covers the metrics that matter, identifies trends early, and sets concrete priorities for the next 90 days.

The Agenda: 90 Minutes, Five Parts

Part 1: Financial Snapshot (20 minutes)

Review these five numbers compared to both last quarter and the same quarter last year. Year-over-year comparison reveals seasonality; quarter-over-quarter reveals trends.

Total revenue — broken down by service type (installation, service/repair, maintenance agreements)
Gross profit margin — Target: 25–35%. If it moved more than two points in either direction, find out why.
Net profit margin — Target: 8–12%. If gross margin is healthy but net is not, overhead is the issue.
Overhead rate — Target: 8–15% of revenue. This is the silent margin killer.
Cash position — Current available cash versus three months ago. Is the bank account growing or shrinking?

Do not just read the numbers. Ask why they moved. If gross margin dropped two points, was it one bad commercial project? A materials price increase you did not pass through? A new technician who is underperforming on efficiency? The story behind the number matters more than the number itself, and that story is where actionable insights live.

Part 2: Operational KPIs (20 minutes)

Revenue per technician — Is each truck earning its keep? Which technicians are above and below the $200K–$350K target range?
Days sales outstanding (DSO) — How fast are you converting invoices to cash? Above 45 days is a warning. Above 60 days is a structural problem.
Service agreement count — Net change: new agreements signed minus cancellations and non-renewals. This number should be positive every quarter.
Backlog — Total contracted but uncompleted work. Is there enough work ahead for the next 3–6 months? Too much for your current capacity?
Bid-to-win ratio — Winning above 50%? Probably underpricing. Below 20%? Overbidding or chasing the wrong work.

Part 3: What Happened This Quarter (15 minutes)

Review the biggest wins and biggest misses of the quarter. Which jobs exceeded margin targets and why? Which jobs blew their budget and why? What went right with staffing—new hires who are performing, retention wins? What went wrong—unexpected departures, callbacks, customer complaints?

The goal is pattern recognition. One bad job is an event. Three bad jobs of the same type is a systemic estimating problem. One technician callback is normal. A rising callback rate across the team signals a training gap. Look for patterns, not anecdotes.

Part 4: Keep / Stop / Start (20 minutes)

This is the action-oriented framework that turns analysis into decisions. Borrowed from the Keep/Stop/Start methodology:

Keep: What is working well? What should we continue doing and potentially double down on? This might be a marketing channel that is producing leads, a pricing structure that is hitting target margins, or a training program that is reducing callbacks.
Stop: What is not working or draining resources disproportionate to its return? This might be a service line that consistently produces below-target margins, a marketing spend with no measurable ROI, or a process that creates more problems than it solves.
Start: What should we begin doing next quarter? Limit this to one or two specific initiatives. Not ten. Not five. One or two things you can actually execute with focus over 90 days.

Part 5: Next Quarter Priorities (15 minutes)

Set two to three specific, measurable goals for the next quarter. Not vague aspirations like "improve profitability" but concrete targets: "Increase gross margin from 27% to 30% by re-pricing residential service rates effective February 1." Or: "Add 50 net new service agreements by end of Q1." Or: "Reduce DSO from 52 days to 42 days by implementing deposit requirements on all jobs over $5,000."

Assign ownership. Every goal has one person responsible for driving it. Set the date and time for the next quarterly review before you leave the room—and protect that calendar slot.

Who Should Be in the Room

At minimum: the owner and whoever manages the financial data (bookkeeper, controller, or fractional CFO). This is the core that makes the numbers meaningful.

Ideally, add your operations manager and your top field supervisor. They bring the operational context that pure financial data cannot provide. When the numbers say gross margin dropped on commercial work, the ops manager can tell you it was driven by three specific projects that required rework. That context is invaluable for making the right decisions.

What to Prepare in Advance

The meeting runs efficiently only if the financial data is ready before anyone walks in. Prepare these documents 3–5 days in advance:

P&L for the quarter, compared to prior quarter and same quarter last year
Balance sheet snapshot (cash, receivables, payables)
Aging report for accounts receivable
KPI dashboard with the ten key metrics
Service agreement summary (new, renewed, cancelled, total active)
Action items from last quarter's review—what was completed, what was not

The Bottom Line

Ninety minutes, four times a year. That is six hours total—less time than most contractors spend dealing with a single problem job. But those six hours give you visibility into trends before they become crises, accountability for the priorities you set, and a structured decision-making process that replaces reactive firefighting with proactive management. Make it a non-negotiable appointment on your calendar. The contractors who do this consistently outperform the ones who do not—and it is not close.