Question 1

Why is revenue up but profit down?

Accepted Answer

Revenue growth without profit growth is almost always caused by margin compression — costs rising faster than prices. Common causes include outdated vendor price lists, service lines with hidden negative margins, and equipment or material costs that have increased without a corresponding pricing adjustment. A Construction Financial Authority identifies this through job-level cost analysis and gross margin departmentalization by service line.

Question 2

Where did the cash go?

Accepted Answer

Cash disappears in construction businesses for three primary reasons: retainage timing locks earned revenue until project completion, progress billing cycles create gaps between work performed and cash received, and overhead growth outpaces margin improvement. A rolling 6-week cash flow forecast makes these gaps visible before they become crises, giving contractors time to adjust rather than react.

Question 3

Why did I lose money on this job?

Accepted Answer

Job-level profitability losses almost always trace back to one of three sources: labor costs that were underestimated because the true fully-loaded burden was not applied to the bid, material costs that increased after the bid was locked, or scope changes that were not properly tracked as change orders. Job costing — tracking actual costs against estimated costs at the project level — answers this question definitively for every job.

Question 4

Why am I always busy but short on cash?

Accepted Answer

Busy contractors run short on cash when their revenue growth outpaces their working capital — a situation where more jobs require more upfront costs before the invoice gets paid. The solution is knowing your break-even revenue requirement, maintaining a cash reserve equal to 4-6 weeks of overhead, and using progress billing structures that keep cash inflow aligned with cost outflow on every project.

Question 5

How do I know which jobs are making money?

Accepted Answer

The only way to know which jobs are profitable is job costing — tracking actual labor, material, subcontractor, and overhead costs at the individual project level and comparing them to the original estimate. Without job-level Profit and Loss (P&L) reporting, you only know whether the entire business made money, not which types of work to grow and which to reprice or avoid.

Question 6

Why does my CPA keep finding problems?

Accepted Answer

CPAs find problems at tax time because most construction company bookkeeping is done on a catch-up basis — transactions recorded incorrectly or late, job costs not matched to the right project, and financial statements that do not reflect the true business position. A Construction Financial Authority keeps the books current and CPA-ready every week, so year-end becomes a strategic conversation rather than a cleanup exercise.

Question 7

What is a fractional CFO and do I need one?

Accepted Answer

A fractional Chief Financial Officer (CFO) provides CFO-level financial leadership — cash flow management, strategic reporting, margin analysis, and lender relationships — on a part-time retainer basis instead of as a full-time $150,000+ per year hire. A Construction Financial Authority combines fractional CFO oversight with weekly bookkeeping, making it the most accessible form of high-level construction financial management for companies doing $1M to $5M in revenue.

Question 8

How do I read my financial reports?

Accepted Answer

A Profit and Loss (P&L) statement shows revenue minus costs over a period of time — but for contractors, it only tells the full story when departmentalized by service line or project type. A Balance Sheet shows what the business owns versus owes at a point in time. A Work in Progress (WIP) schedule shows the true earned revenue position on active projects. All three together give a complete financial picture of a construction business.

Question 9

How do my numbers compare to other Florida contractors?

Accepted Answer

Florida trade contractor benchmarks vary significantly by trade type and revenue range. HVAC companies typically target 35-42% gross margins on service work and 28-35% on equipment installations. Roofing companies in Florida typically run 30-38% gross margins on residential and 25-32% on commercial. The Annual Florida Trade Contractor Financial Benchmark Report provides the most current data across all eight trade verticals in the Tampa Bay and statewide Florida market.

Question 10

How do I prepare my business for growth or sale?

Accepted Answer

A construction or trade business becomes more valuable and more sellable when it has documented processes, clean recurring financial records, a client retention rate above 90%, and financial infrastructure that does not depend entirely on the owner's personal involvement. A potential buyer or investor evaluates a service business on the strength of its recurring revenue, its financial reporting quality, and the degree to which it can operate without the founder present every day.

Question 11

What do I need to know about my software?

Accepted Answer

Most field service management software — ServiceTitan, AccuLynx, Jobber, Buildertrend — creates a data disconnect when it syncs to QuickBooks Online. Revenue recognized in the field software rarely matches the accounting entries without expert General Ledger (GL) mapping and Chart of Accounts (COA) configuration. A Construction Financial Authority who understands both the trade-specific software and the accounting system bridges this gap and ensures your books reflect what your field is actually producing.

Question 12

What are my rights and risks with the IRS?

Accepted Answer

Construction and trade companies face specific IRS risk areas including subcontractor 1099 misclassification, improper deduction of mixed-use expenses, and payroll tax compliance for prevailing wage work. An Enrolled Agent (EA) — unlike a standard bookkeeper or CPA — is federally licensed by the IRS to represent taxpayers directly before the agency, respond to IRS correspondence, and negotiate on behalf of the business if issues arise.

The Questions Every Contractor Is Asking

Browse by Question

Why Is Revenue Up But Profit Down?

Where Did the Cash Go?

Why Did I Lose Money on This Job?

Why Am I Always Busy But Short on Cash?

How Do I Know Which Jobs Are Making Money?

Why Does My CPA Keep Finding Problems?

What Is a Construction Financial Authority?

How Do I Read My Financial Reports?

How Do My Numbers Compare to Other Florida Contractors?

How Do I Prepare My Business for Growth or Sale?

What Do I Need to Know About Software?

What Are My Rights and Risks with the IRS?

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