Reading a profit and loss statement as a contractor
Plain-English look at the numbers a trade business owner should check every month.
- Revenue versus job costs. Subtract materials, labor and subs for each job to see real gross profit.
- Overhead you control. Insurance, vehicles, software and phone bills show up here; review them quarterly.
- Compare month to month. One month alone misleads in seasonal trades; look at the trend.
- Ask your bookkeeper what is missing. Unrecorded receipts make profit look better than it is.
Common questions
How often should I look at it?
Monthly is a good habit; set a 20-minute slot.
What is a healthy margin?
It varies by trade; compare against your own past months first.
See also the contractor guides and free tools.
General information, not legal or financial advice. Verify with your attorney or accountant.
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