For Finance Directors in contracting and civil engineering firms, the difference between profit and loss often hinges on data-driven decision-making. Tracking the right financial metrics ensures projects remain on budget, risks are mitigated, and stakeholders stay informed. This guide outlines five essential metrics every FD should monitor to maintain financial control and drive project success.
Gross margin per project
Understanding profitability at a project level is crucial. Calculating gross margin helps leaders identify which projects are performing well and which may require corrective action. Integrated construction management software can provide live dashboards that display gross margins across active projects, giving decision-makers immediate visibility.
Labour utilisation rate
Measuring the efficiency of the workforce is vital to controlling costs. Underutilised teams increase expenses without delivering corresponding value. Construction management software with integrated timesheet tracking ensures that labour can be recorded and allocated efficiently, maximising productivity and reducing unnecessary spend.
Cost variance
Tracking the difference between budgeted and actual spend allows firms to address potential overruns before they escalate. Early identification of cost variance enables timely interventions that keep projects on track.
Cash flow forecasting
Predicting cash inflows and outflows is essential to maintaining liquidity and ensuring timely payment to subcontractors and suppliers. Accurate forecasting helps senior leaders plan ahead and prevent financial bottlenecks, while software tools provide precise, real-time cash flow projections.
Change order impact
Construction projects often experience scope changes that can affect profitability. Monitoring the financial impact of change orders ensures that any adjustments are properly reflected in project budgets. Using construction management software allows companies to adjust cost forecasts when changes occur, reducing the risk of unexpected overruns.
Conclusion
By focusing on these five key metrics, Finance Directors gain actionable insights that support smarter budgeting, better resource allocation, and stronger project outcomes. Leveraging construction management software amplifies the value of these metrics, offering real-time visibility and a strategic advantage for senior decision-makers.
Schedule a demo of Evolution Mx to see how our reporting tools Business Analytics & Dashboards to see how your firm can track these metrics seamlessly.
