Running a construction business in the UK isn’t just about bricks and mortar – it’s about numbers too. At SGL Accountancy, we specialise in helping construction and property businesses understand their figures. The better you know your numbers, the better decisions you make – and that means more profit, less stress, and a stronger business.
Whether you’re managing residential builds, commercial projects, or property renovations, these seven financial metrics are essential to track if you want to stay on top of your game.
1. Gross profit margin
What is gross profit margin?
Gross profit margin shows how much money you’re actually making from each job before your overheads – like office costs or admin staff – come into it.
Formula:
Gross Profit Margin = (Revenue – Direct Costs) ÷ Revenue × 100
Why it’s crucial
It helps you understand if your pricing is right and if you’re managing labour and materials properly. If your margin is too low, it’s a red flag: you might be undercharging, or your costs might be too high.
At SGL, we help construction businesses analyse this regularly. Sometimes a small change – like negotiating better supplier deals – can bump your margins up significantly.
2. Net profit margin
What is net profit margin?
This is the bottom line – how much of your income is actual profit once everything’s paid: materials, staff, rent, insurance, tax… the lot.
Formula:
Net Profit Margin = Net Profit ÷ Revenue × 100
Why it matters
If you’re working hard but not seeing much return, this is where to look. A healthy net profit margin in the UK construction industry is typically around 5%–10%, depending on the type of work you do.
At SGL Accountancy, we help construction firms look at trends in this figure over time – are profits going up, down, or flatlining? Knowing the answer helps you make smarter business choices.
3. Cash flow
What is cash flow?
Cash flow is all about money movement – how much is coming into your bank account, and how much is going out.
There are two types to track:
- Positive cash flow = you’re bringing in more than you spend
- Negative cash flow = you’re spending more than you earn
Why it’s everything
Even profitable businesses can collapse if they run out of cash. Construction businesses often face delayed payments, especially with long-term contracts. One large unpaid invoice can cause chaos.
We help clients prepare cash flow forecasts so they know what’s coming. With that knowledge, you can plan when to hire, when to buy, and when to hold off.
4. Job costing accuracy
What is job costing?
Job costing means tracking every cost on every job – labour, materials, transport, plant hire – so you know exactly what each project earns you.
Why it’s key
Without accurate job costing, you’re guessing your profits. And in construction, guesses can cost thousands. At SGL, we help businesses move from rough estimates to clear, confident project profitability.
You’ll know which types of jobs make the most money – and which ones to avoid.
5. Accounts receivable turnover
What does this measure?
This tells you how quickly your customers pay their invoices. It’s worked out like this:
Formula:
Accounts Receivable Turnover = Net Credit Sales ÷ Average Accounts Receivable
Why it helps
A low turnover means clients are taking too long to pay – and that means you’re funding the project until they do. This can choke your cash flow.
We help firms set up simple systems for better credit control – sending reminders, setting terms, and charging late fees if necessary. With faster payments, you’ll have more working capital available.
6. Work-in-progress (WIP) reporting
What is WIP reporting?
Work-in-progress reports show how your ongoing projects are doing financially. They track how much of the project is complete and how much income and cost has occurred so far.
Why it matters
Without WIP reports, it’s easy to lose track. A job might seem profitable on paper but be bleeding cash in reality.
At SGL Accountancy, we prepare monthly WIP reports for many of our clients so they can spot any runaway costs early – before the profit disappears.
7. Break-even analysis
What is it?
Break-even analysis shows how much revenue you need just to cover your costs – no profit, no loss.
Why it’s powerful
Knowing your break-even point helps you set minimum sales targets and understand the financial impact of taking on a job – or turning one down.
It’s especially useful for seasonal builders or firms juggling multiple projects. We run these calculations regularly for clients, helping them stay confident and in control.
How we help at SGL Accountancy
At SGL Accountancy, we go beyond tax returns. We work hand-in-hand with construction businesses across the UK to give them the financial clarity they need.
Here’s what our construction clients love about working with us:
✅ Simple, no-jargon advice
✅ Industry-specific knowledge
✅ Help with job costing and cash flow forecasting
✅ Easy-to-read monthly reports
✅ Support with getting paid on time
✅ Fixed fees and no hidden costs
Free construction finance health check
Want to know how your business is really doing?
We offer a financial health check for construction businesses. We’ll review your current figures, check where you might be losing money, and give you a practical action plan.
Just give us a ring or send us a message on our contact page. No pressure. Just smart advice from people who know your industry.
Let’s build your profits together
Construction is hard work. But keeping track of your numbers doesn’t have to be.
At SGL Accountancy, we’re passionate about helping builders, contractors, and property firms make sense of their finances. When you understand your numbers, you can grow your business, reduce stress, and focus on what you do best – building.
If you’d like to chat to one of our team about your construction accounts, we’re always here to help. Give us a call or book your free consultation today.