Best Format for the Construction Profit and Loss Statement
Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
As a construction company owner, you need a profit and loss statement that conveys information in a format that will identify how much you are truly making as a profit. The best format is a construction profit and loss statement identifying contract revenues, direct costs, indirect costs and the overhead expenses. This format most closely matches the estimating style of most small construction companies.
At the end of the day, it is about the profit you make with your company. This format will point out where the problem is located and where the best performance occurs. When looking at a P&L, a reader wants to quickly identify issues and concerns and get them addressed. If you use this format along with the project accounting reports illustrated in other articles, not only will you quickly discover problems, but you can actually pin point the underlying issues and get them resolved. This will add thousands of dollars to your bottom line. As you read this article, remember you are trying to improve that bottom line, this format is absolutely the best tool to achieve that goal.
The construction profit and loss statement has four major sections: revenue, direct costs, indirect costs and overhead. Each section is described below and the profit and loss statement is illustrated as each section is described.
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