The 7 Numbers Every NZ
Tradie Should Check
Every Month
Your business can feel busy and still be leaking profit. These seven monthly numbers give you a clear pulse on cash, margin and whether the business is moving in the right direction.
Most tradies can tell you how busy they are. The better question is whether that busyness is actually turning into profit.
These seven numbers are the ones every New Zealand trade business should check once a month. They are not glamorous, but they are the best early warning system for cash flow trouble, shrinking margins and work that is costing more than it earns.
Revenue
Revenue shows how much work your business has converted into invoices. It is the base of everything, but it is only useful when paired with the next numbers.
If revenue is rising but profits are flat or falling, the business is probably growing in volume without growing in value.
Gross margin
Gross margin measures the money left after you pay direct costs such as materials, subcontractors and labour for the job. It is the clearest signal of whether your pricing and job costing are strong.
A tradie business can have decent revenue and still be weak if gross margin is too low. Tracking this every month means you can see the impact of material cost changes, subcontractor spend and pricing decisions quickly.
Labour recovery
Labour recovery shows whether the hours your team works are being recovered in invoices. This is often the number that separates busy but unprofitable businesses from ones that actually generate cash.
If your crew is spending time on work that is not fully billed, or if you're writing off hours regularly, the business is quietly losing money.
Work in progress
Work in progress (WIP) is the value of jobs that are started but not yet complete or invoiced. It is a vital measure of jobs that are still tied up in the business.
Too much WIP can mean you are carrying risk and cash tied up in unfinished work. Too little can mean you are not tracking jobs properly or that completed work is not being moved to invoicing fast enough.
Debtors
Debtors are the amounts customers owe you. This number is one of the biggest cash flow pressure points for tradie businesses.
High debtor balances usually mean invoices are not being chased, terms are too soft, or collection processes are weak. It is the difference between getting paid on time and funding other people’s credit.
Cash in bank
Cash in the bank is the number that matters most when it comes to survival and growth. Revenue, margin and debtors are important, but actual cash tells you whether you can pay wages, suppliers and tax.
When cash is low, the business is vulnerable even if the numbers on paper look okay. Healthy cash levels reduce stress and give you room to make better decisions.
Net profit
Net profit is the bottom line after all expenses have been accounted for. It shows whether the business is generating enough surplus to fund future investment, tax and owner drawings.
Tracking net profit monthly keeps the focus on real results, not just sales or activity.
"If you review the right seven numbers every month, you can spot the problem before it turns into a cash crisis."
These seven numbers are the backbone of a simple, effective monthly review. They keep the focus on cash, margin and the true profitability of the work you deliver.
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