The Most Overlooked Items in Water Restoration Financials
Small details can quietly cost you big money.
Running a water restoration business takes speed, skill, and nonstop coordination—but the financials can’t be an afterthought. Unfortunately, many contractors only look at top-line revenue or net income and miss the red flags hiding in between. Here are some of the most commonly overlooked items in restoration financials—and how they can impact your cash flow, pricing, and profitability.
1. Untracked Labor Burden
You may know your hourly wage rates, but have you added in payroll taxes, workers’ comp, paid time off, and benefits? That’s your true labor cost per hour—and it’s almost always higher than expected.
Why it matters: If you don’t calculate burdened labor, your job costing and pricing are off from the start. You may think you're making money on a job when you're actually breaking even—or worse.
2. Equipment Depreciation or Rentals
Owned equipment wears out. Rented equipment adds up. But many contractors don't include either in their COGS or job costing.
Why it matters: If you're not building the cost of drying equipment into each job, your margins are inflated on paper and eroded in real life.
3. Subcontractor Costs Not Properly Allocated
Did a subcontractor help with demolition, rebuild, or plumbing? If you log that invoice but never assign it to a specific job, you won’t know true job profitability.
Why it matters: You can't fix low-margin jobs if you're not tracking the full cost per project.
4. Credit Card Fees Deducted from Payments
Insurance companies often pay via credit card or platforms like Xactimate Pay—and processing fees come out before the money hits your account.
Why it matters: If you book the full invoice amount as income without accounting for the fees, you're overstating revenue and understating expense.
5. Retainage or Uncollected A/R Aging Out
That large rebuild payment you're expecting may not be as current as you think. If you’re not reviewing aging reports regularly, old receivables and retainage can distort your cash flow picture.
Why it matters: Profit on paper doesn't help you make payroll. You need to know how much is collectible—and when.
6. Owner Draws or Personal Use of Company Funds
Sometimes it’s a gas charge. Sometimes it’s a Home Depot run that gets split. Over time, these personal draws (if not clearly logged) mess with your real overhead numbers.
Why it matters: Blurred financial lines mean your reports don’t reflect the true cost of running your business.
Don’t Let Profit Leak Through the Cracks
The good news? Every one of these issues can be fixed—with better tracking and more intentional reporting. At Kiwi Cash Flow, we work with restoration contractors to clean up their financials, track the metrics that matter, and make sure profitability isn’t just a guess.
👉 Schedule a call here to see where money might be hiding—or leaking—in your business.