Daaxit, a provider of fractional CFO services for contractors, has published a new educational guide aimed at helping construction firms transform key performance indicators (KPIs) into a monthly management scorecard. The resource, available on Daaxit's website, is designed for contractors who collect financial and project data but lack a consistent process for reviewing it, assigning responsibility, and acting on the results.
The guide begins with financial indicators that reflect the overall health of a construction business, including revenue, gross profit, gross-margin percentage, net profit, EBITDA, cash flow, accounts receivable, debt, and working capital. It then addresses job-level indicators such as estimated margin, current margin, labor productivity, work in progress, underbilling, overbilling, change orders, and cost to complete. By reviewing these measures while projects are still active, leadership teams can get a more current view of performance than waiting until jobs are closed.
“I don’t believe in creating extra layers of reporting. That’s why a scorecard should make responsibility clearer, reducing the need for more reporting,” said Aaron Mills, Founder and CEO of Daaxit. “The purpose is to show what changed, who owns the result, and what action needs to follow during the next review cycle.”
Daaxit emphasizes that cash flow should be reviewed separately from reported profit. The guide identifies cash forecasts, receivables aging, retainage, payroll requirements, vendor obligations, debt payments, and billing position as key measures that can explain why a profitable contractor may still face liquidity constraints. Similarly, backlog is evaluated separately from total contracted work, with attention to expected margin, labor availability, project timing, customer payment terms, material exposure, and the company's capacity to perform the work. This distinction helps leadership teams differentiate between activity and financial strength; a growing backlog may support future revenue but can also increase working-capital demands and operational risk if staffing, billing, or job-cost assumptions are not reviewed.
Mills recommends assigning an owner to each major KPI and reviewing results on a regular monthly schedule. Financial indicators may be owned by the CFO or finance lead, while labor productivity, change-order status, billing, collections, and project performance may involve operations, project management, accounting, or department leaders. The guide also advises tracking targets, current results, prior-period results, and required follow-up actions. This format helps leadership teams identify trends and document responsibility without expanding the scorecard beyond the measures used for decision-making.
The KPI categories can be adapted for various contractor business models. Service contractors may focus more on technician productivity, dispatch performance, service agreements, and fleet use, while project-based contractors may emphasize work in progress, cost to complete, underbilling, retainage, and backlog margin. The resource also suggests separating performance by division, location, project type, estimator, project manager, or crew when company structure requires more detailed analysis. This allows leadership to determine where results are being produced and where corrective action may be needed.
Mills describes the process as a management routine rather than a one-time dashboard project. The value of the scorecard depends on consistent data, regular review, clear explanations of variances, and follow-through on assigned actions. The full framework is available at Daaxit.
