You don't need a finance degree to run a restoration company. You need about five numbers, looked at once a month, before they become problems. Most owners I talk to get a P&L (profit and loss statement) from their bookkeeper, glance at the bottom line, and move on. The bottom line is the last place trouble shows up. By the time profit looks wrong, the cash is already gone.
Here is the short list I would put in front of any restoration or reconstruction owner. Each number maps to one lever you can pull. If a number doesn't tell you what to do, it doesn't belong on the page.
1. Days of cash on hand
Take your cash balance and divide it by your average daily cash going out. The answer is how many days you could operate if nothing came in.
The trap in restoration is the denominator. A quiet week and a week after a big loss are not the same burn rate. Crews go on overtime, equipment gets rented, subs mobilize, and you pay for all of it before the carrier pays you. Calculate it twice: once at ordinary spend, once at your busiest week's spend. The second number is the one that tells you whether a big job can hurt you.
The lever: a floor, with a named trigger. When days of cash drops below it, you slow hiring, call the bank, or chase a supplement. You decide in advance, not in a panic.
2. Gross margin by service line
Mitigation and reconstruction do not earn the same margin, and a blended number hides the difference. Water mitigation is fast, equipment-heavy and priced on a schedule. Rebuild is slower, sub-heavy and prone to scope creep. If both sit on one line of your P&L, a great month in one can mask a bad month in the other.
Ask your bookkeeper for revenue and direct cost split at least three ways: mitigation, reconstruction, and contents or specialty work if you do it. Direct cost means labor, materials, subs and equipment attributed to jobs, not overhead.
The lever: pricing and scope discipline in the service line that is slipping, not across the whole company.
3. Work in progress: over- and underbilling
On any job that spans month-end, you have either billed more than you have earned (overbilled) or earned more than you have billed (underbilled). Underbilling is the dangerous one in restoration. It usually means work is done and documented somewhere but the invoice, the supplement or the ACV (actual cash value) billing hasn't gone out.
If you track job-level percent complete against billed to date, this number is a monthly schedule that takes minutes to read. If you don't, your P&L is guessing at revenue.
The lever: a billing cadence. Underbilled jobs get an invoice or a supplement this week.
4. Receivables aging, with recoverable depreciation broken out
Accounts receivable aging shows who owes you and for how long. In restoration, one lump-sum receivable number is nearly useless because it mixes very different things: ACV payments the carrier owes, the homeowner's deductible, recoverable depreciation that is held until completion documents are accepted, and supplements still under review.
Separate them. Recoverable depreciation that is thirty days old and waiting on your completion paperwork is a different problem from a supplement that has sat unanswered for sixty. One is your task. The other is a follow-up call.
The lever: a named person and a weekly list for anything past your own target days. Don't let the aging report be a monthly surprise.
5. Cost per booked job
Take what you spent on marketing, referral fees and lead sources in a month and divide it by the number of jobs actually booked from them. Not leads, not calls: booked jobs. Then compare it against the gross profit of the average job in the service line it came from.
This one is easy to skip because spending on marketing feels like a growth decision, not a finance one. But a lead source that costs more than the gross profit it produces is a subsidy you are paying for.
The lever: move the budget to the source that pays for itself and cut the one that doesn't.
Why these five and not fifty
Each number answers a different question. Days of cash asks whether you survive. Margin by service line asks whether the work pays. WIP asks whether your revenue is real yet. Receivables aging asks whether you are getting paid. Cost per booked job asks whether growth is profitable. Together they cover the cycle from winning work to collecting on it.
To be plain about what this is: it is a working framework from how restoration cash actually moves, not a finding from a study. I am not claiming a benchmark for any of these numbers, because your right answer depends on your mix of work, your carriers and your market. The point is to know your own numbers and watch them move.
What to do this month
Ask your bookkeeper for one page with these five numbers, in this order, by the tenth of the month. If any of them can't be produced from your books today, that is your first finding. It usually means the chart of accounts needs a mitigation and reconstruction split, or job costing isn't set up. Fix that first.
Building this page each month, and explaining what to do about what it says, is the core of what a fractional CFO does for a restoration company. If you want that, see our CFO subscription, or reach out and we can look at your five numbers together.
This article is general education, not accounting, tax or legal advice. Your situation depends on your entity, state and contracts, so talk with your own advisors before acting.
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Sources:
- Practice and opinion piece. No third-party statistics are used. Days of cash on hand, gross margin, work-in-progress over- and underbilling, receivables aging and cost per acquisition are standard accounting and management definitions applied to restoration cash timing by Kiwi Cash Flow.