Water Restoration Financials: What Every Restoration Owner Needs to Know
When it comes to running a water damage restoration company, most owners focus on marketing, equipment, and staffing—but the businesses that grow profitably and sustainably are the ones who understand their financials.
If you don’t have a clear handle on your water restoration financials, you're flying blind. In this post, we’ll walk through the key financial metrics, reports, and systems that every restoration owner should track—so you can stop guessing and start making decisions based on real numbers.
What Do “Water Restoration Financials” Actually Include?
The term water restoration financials refers to the core financial data that reveals how your business is performing. That includes:
Profit & Loss (P&L) Statements
Job Costing Reports
Balance Sheets
Cash Flow Statements
Accounts Receivable Aging
Key Performance Indicators (KPIs)
These reports tell you whether your jobs are profitable, your overhead is under control, and your growth is financially sustainable.
1. Start with a Clean Chart of Accounts
Many restoration companies use generic bookkeeping setups. That’s a mistake. Your chart of accounts should be tailored to your industry.
Examples of categories specific to water restoration financials:
Mitigation Labor (COGS)
Reconstruction Labor (COGS)
Subcontractors
Drying Equipment Rental or Maintenance
Insurance Program Fees
Emergency Services Revenue
Pack-out and Contents Cleaning Revenue
When your books are structured correctly, you can see what’s driving profit—and what’s dragging it down.
2. Track Gross Profit by Job Type
Restoration isn’t one-size-fits-all. A water extraction job and a full rebuild don’t carry the same margins.
Track gross profit margins by job type:
Job TypeTypical Gross MarginWater Mitigation55–70%Mold Remediation50–65%Fire & Smoke Restoration45–60%Contents & Pack-outs35–50%Reconstruction20–35%
If your water damage jobs aren’t hitting at least 55% gross margin, it’s time to review your estimating process, labor costs, and billing timelines.
3. Understand the Cash Flow Cycle
Water restoration companies often face delayed cash flow, especially when insurance billing is involved.
To stay cash flow positive:
Monitor A/R aging and follow up weekly
Forecast incoming payments and upcoming expenses
Build cash reserves to cover payroll and materials during payout delays
A healthy restoration business knows its cash burn rate and how long it can operate without new payments coming in.
4. Use KPIs to Monitor Financial Health
Tracking restoration-specific KPIs monthly can help you catch red flags early:
Average Job Size
Labor % of Revenue
Gross Margin %
Overhead %
Net Profit %
Days Sales Outstanding (DSO)
Jobs per Technician
These metrics give you insight into efficiency, pricing, overhead drag, and team productivity.
5. Forecast, Don’t Just Look Back
Your P&L tells you where you’ve been—but a forecast tells you where you're headed. Use a 12-month forecast to:
Predict slow seasons and prepare early
Plan hiring and equipment purchases responsibly
Avoid cash flow gaps from job timing issues
Good water restoration financials don’t just report—they help you plan.
Final Thoughts
Understanding your water restoration financials isn’t optional—it’s the foundation of a strong business. Whether you're a solo operator or managing a large team, the companies that succeed long-term are the ones that build financial visibility into their operations.
Want better visibility into your restoration company’s financials?
We help restoration contractors structure their books, track the right KPIs, and make confident financial decisions.
👉 Schedule a financial clarity call with Kiwi Cash Flow