The construction KPIs worth tracking are the ones that tell you, while a job is still running, whether it will make money and whether the business has the cash to get there. For most builders that comes down to about twelve numbers: forecast margin by job, cost to complete, over or under claiming, committed costs not yet invoiced, claims outstanding by age, debtor days, retentions held and due, variations raised against variations claimed, labour hours against the estimate, weeks of cash cover, forward work, and one safety lead indicator. Below, each one has a plain definition, the calculation, where the data usually lives, how often to look at it and the warning sign to watch for.
If that sounds like a lot, start with five. The Monday report section further down shows which five, and how to grow from there.
Why most construction reports don't help
Most building businesses already have plenty of reports. The month-end pack, the job cost report, the aged debtors list and the cash flow spreadsheet all exist somewhere. The trouble is timing and trust.
The month-end pack lands two or three weeks after the month closes. By then the costs it reports were incurred four to seven weeks ago. That gap has a few causes, and they repeat in almost every business we look at:
- Costs reach the job when the bill is entered, not when the work is ordered. A subcontract signed today won't show in the job report until the first claim is keyed in.
- Labour waits for payroll. Hours worked on Monday reach the job after the pay run is processed, often the following week.
- The job system and the accounts don't share information. Someone retypes or exports between them, usually in a monthly batch.
- Reports are built by hand. If one person builds the report when they have time, it arrives late in busy months, which are exactly the months you need it.
So a job can be running over in week two and look fine until week five. By then the stage is finished, the variation you should have raised is harder to argue for, and the next stage may be priced on the same wrong assumptions.
The fix is to look forward as well as back. Actual costs show where a job has been. Committed costs (orders and subcontracts you've agreed to but haven't been billed for yet) and cost to complete show where it's heading. Several of the KPIs below exist to give you that forward view.
The 12 construction KPIs at a glance
- Forecast gross margin by job: what each job will make if the current forecast holds.
- Cost to complete: what's still to be spent to finish each job.
- Over or under claimed (WIP position): whether you've claimed ahead of or behind the work done.
- Committed costs not yet invoiced: money you've agreed to spend that hasn't been billed yet.
- Progress claims outstanding by age: claims sent but not paid, grouped by how late they are.
- Debtor days: how long, on average, clients take to pay.
- Retentions held and due: cash held back by clients, and when it should come back.
- Variations raised against variations claimed: extra work agreed on site that hasn't reached a claim.
- Labour hours against the estimate: hours booked to each job compared with the hours allowed.
- Weeks of cash cover: how many weeks of committed outgoings your cash covers.
- Forward work (backlog): contracted work not yet done, in months of turnover.
- One safety lead indicator: a measure of safety work done before anything goes wrong.
The sections below group them by who usually acts on them. Most of them should be visible to everyone, but each one needs an owner.
KPIs for project managers: is each job on track?
Forecast gross margin by job
- What it is: the margin each job will finish on if the current cost forecast holds.
- How it's calculated: forecast margin = contract value including approved variations − (cost to date + cost to complete). As a share of the job: forecast margin ÷ contract value.
- Where the data lives: contract value and variations in the job or estimating system; cost to date in the accounts and the job system; cost to complete from the project manager.
- How often: weekly for active jobs.
- Warning sign: the forecast margin falls two weeks running, or sits below the margin you priced the job at.
Cost to complete
- What it is: the project manager's estimate of what's still to be spent to finish the job.
- How it's calculated: cost to complete = remaining budget adjusted for what the PM knows now. Forecast final cost = cost to date + cost to complete. Compare forecast final cost with the budget.
- Where the data lives: usually in the PM's head or a spreadsheet, which is the problem. Budgets sit in the estimating or job system.
- How often: updated by the PM at least monthly, weekly on large or troubled jobs.
- Warning sign: a cost to complete that hasn't changed in a month on a job that's clearly moving, or a forecast final cost above the budget.
Committed costs not yet invoiced
- What it is: the value of purchase orders, subcontracts and approved subcontractor variations still to be billed.
- How it's calculated: for each order or subcontract, committed value − invoiced to date. Add them up by job and cost code.
- Where the data lives: purchase orders and subcontracts in the job or project system (or someone's inbox); invoices in the accounts. They need the same job number and cost code to be matched.
- How often: weekly.
- Warning sign: cost to date plus committed costs is already close to the budget while the job still has a long way to run. Also watch for invoices that come in above the committed amount. Our article on tracking committed costs against the PO covers this in detail.
Variations raised against variations claimed
- What it is: extra work agreed on site that hasn't yet been priced, approved or claimed.
- How it's calculated: list every variation with its status (raised, priced, approved, claimed). The KPI is the count and value of approved variations not yet on a claim, plus raised variations still waiting for a price.
- Where the data lives: a variation register, which in many businesses means site diaries, emails and the PM's notes.
- How often: weekly, and before every progress claim.
- Warning sign: any approved variation that missed the last claim. That's revenue you've earned and haven't asked for. See the variation that never got billed.
Labour hours against the estimate
- What it is: hours booked to each job, or each stage, compared with the hours allowed in the estimate.
- How it's calculated: actual hours to date ÷ estimated hours for the work completed so far. Over 1.0 means the crew is running over.
- Where the data lives: timesheets in a time app or payroll; estimated hours in the estimating system.
- How often: weekly. Labour drifts quietly, and it's the cost a PM can most easily act on.
- Warning sign: the same trade or stage running over on more than one job. That's usually an estimating habit, not bad luck. Our article on comparing estimate vs actual shows how to find the pattern.
KPIs for finance: are we claiming and collecting properly?
Over or under claimed (the WIP position)
- What it is: whether you've claimed more than the work done (over-claimed) or done more work than you've claimed (under-claimed).
- How it's calculated: percentage complete = cost to date ÷ forecast final cost. Earned revenue = contract value × percentage complete. Over or under claimed = claimed to date − earned revenue. Positive is over-claimed; negative is under-claimed.
- Where the data lives: claims and costs in the accounts; contract values, variations and cost to complete in the job system and from the PM.
- How often: monthly at minimum; weekly if the report builds itself.
- Warning sign: a large over-claimed balance on a job with rising costs (the cash is already spent and the costs are still coming), or a growing under-claimed balance (you're funding the job). Our guide to WIP reports and how to calculate them has a worked example.
Progress claims outstanding by age
- What it is: claims you've sent that haven't been paid, grouped by days past the due date.
- How it's calculated: list each unpaid claim with its due date under the contract and the security of payment rules, then group into current, up to 15 days late, 15 to 30, and over 30.
- Where the data lives: invoices and receipts in the accounts; claim dates and payment schedules in the job or claims system.
- How often: weekly.
- Warning sign: any claim past its due date without a payment schedule, or a payment schedule you haven't checked against the claim. The deadlines differ by state; see our guide to progress claims, payment schedules and retentions.
Debtor days
- What it is: on average, how many days your clients take to pay.
- How it's calculated: debtor days = trade debtors ÷ revenue for the period × days in the period. Work it out for the business and, more usefully, for each client.
- Where the data lives: the accounts.
- How often: monthly, with the trend over the last few months.
- Warning sign: debtor days creeping up month after month, or one large client paying later each claim. That client's actual pay lag should feed your cash flow forecast, not the contract terms.
Retentions held and due
- What it is: cash your clients are holding back as security, and the dates it should be released.
- How it's calculated: for each job, retention held to date, the release amount at practical completion, the release amount at the end of the defects period, and the dates of each.
- Where the data lives: often a separate spreadsheet, because most accounting systems treat retention as a balance rather than a dated amount.
- How often: monthly, and whenever a job reaches practical completion.
- Warning sign: a release date that has passed without a release claim. Retentions you hold from subcontractors need the same treatment going the other way.
KPIs for the owner: is the business safe and growing?
The owner should see the job-level numbers above, rolled up. These three are the business-level ones.
Weeks of cash cover
- What it is: how long your available cash would cover your committed outgoings if no more claims were paid.
- How it's calculated: weeks of cover = available cash ÷ average weekly committed outgoings (wages, subcontractor and supplier payments due, tax and loan repayments) over the next few weeks.
- Where the data lives: bank balances in the accounts; outgoings from payroll, committed costs and the bills due.
- How often: weekly, next to the 13-week cash flow forecast.
- Warning sign: cover falling below the level you and your accountant have agreed, or a low week in the forecast that depends on one large claim being paid on time. Our post on building a cash flow forecast from WIP and the claim schedule explains the forecast behind this number.
Forward work (backlog)
- What it is: contracted work not yet done, expressed as months of turnover.
- How it's calculated: forward work = total contract value of signed jobs (including approved variations) − revenue earned to date on those jobs. Divide by your average monthly turnover to get months of work.
- Where the data lives: contract values in the job system; earned revenue from WIP.
- How often: monthly.
- Warning sign: forward work shrinking for several months while the team stays the same size, or a jump in forward work at margins below what you usually price.
One safety lead indicator
- What it is: a measure of safety work done before an incident, rather than a count of incidents after one.
- How it's calculated: pick one your safety adviser already uses, such as site inspections completed against inspections planned, or hazard reports closed out on time against hazard reports raised.
- Where the data lives: your safety or site app, or site diaries.
- How often: weekly or monthly, by site.
- Warning sign: a site falling behind on planned inspections or close-outs. We don't advise on safety systems; the point here is only that the number sits on the same report, so it gets looked at.
Why these numbers go wrong
When a builder tells us their KPIs can't be trusted, the cause is almost always one of four things.
- Information typed in again. The contract value is typed into the estimate, the contract, the job system, the claim spreadsheet and the accounts. Each copy can drift. This is double entry: the same information typed into two systems.
- Information that stops before it's needed. A variation agreed on site never reaches the claim. A purchase order raised by phone never reaches the job report.
- Systems that disagree. The PM's spreadsheet, the job system and the accounts each give a different cost to date. Without a [single source of truth](/guides/plain-english-glossary#single-source-of-truth) (one place everyone takes the number from), the Monday meeting becomes an argument about whose figure is right.
- Numbers that arrive too late. Costs coded when the bill is paid, labour that waits for payroll, and reports built by hand at month-end.
None of these is fixed by a better report template. They're fixed upstream, by agreeing one job number and one set of cost codes across estimating, the job system and the accounts, and by connecting the systems so costs land on the job when they're incurred. Our page on why job profit shows up too late traces where each kind of cost gets delayed.
The Monday report: where to start
You don't need all twelve on day one. A short weekly report that people read beats a long one nobody opens. Start with these five, because they cover cash, profit and what's coming:
- Cash position against the outgoings due in the next two weeks.
- Progress claims outstanding, by age.
- Budget against forecast final cost for each active job.
- Committed costs not yet invoiced.
- Key dates in the next fortnight: claim deadlines, payment schedule deadlines, practical completion, retention release dates and subcontractor starts.
Then add the rest in this order, as the data gets reliable: forecast margin and cost to complete once PMs update cost to complete on a set day; the WIP position once variations are in the contract values; variations raised against claimed once there's a register; labour against estimate once timesheets are coded to jobs; and the owner-level numbers last.
An example one-page report
This example is for a made-up builder with four active jobs. All figures are invented to show the layout, in thousands of dollars.
- Cash: bank 410, outgoings due in the next two weeks 365, weeks of cover about 2.5.
- Claims outstanding: 3 claims, total 520. One of them (Job 103, 140) is 12 days past due with no payment schedule received.
- Job 101, townhouses: contract 2,400, forecast final cost 2,190, forecast margin 210, down 25 since last week because of a framing overrun. Committed not invoiced 380.
- Job 102, office fit-out: contract 850, forecast final cost 760, forecast margin 90, steady. Two approved variations (total 34) not yet claimed.
- Job 103, house extension: contract 620, forecast final cost 575, forecast margin 45. Labour running at 1.15 times the estimate on the last three weeks.
- Job 104, warehouse slab: contract 1,100, just started. Cost to complete not yet updated by the PM.
- Next fortnight: claim for Job 101 due on the 25th; payment schedule due on a subcontractor claim for Job 102 on the 19th; retention release claim for a finished job due on the 28th.
That's enough for a short Monday meeting that ends in decisions: chase the Job 103 claim, get the two Job 102 variations on the next claim, ask why framing on Job 101 is over, and get a cost to complete for Job 104.
What it looks like when it's fixed
When the systems share one job number and one set of cost codes, this report builds itself overnight. On Monday morning it's in your inbox before anyone has touched a spreadsheet. The PM sees the same cost to date as finance. A variation approved on site on Thursday is already on the list of items for the next claim. A subcontractor invoice that comes in over its order is flagged before it's paid. And when a job starts to slip, you see it in the week it happens, while the crew, the sequence or the order can still change.
If you'd rather have the KPIs on a dashboard that refreshes from your job system and accounts, that's what our construction KPI dashboards service sets up. The full picture of how job costing, WIP, claims and cash flow fit together is in our construction finance systems guide.
Frequently asked questions
What KPIs should a construction company track?
Start with cash against upcoming outgoings, progress claims outstanding by age, budget against forecast final cost for each job, committed costs not yet invoiced, and key dates for the next fortnight. Then add forecast margin, cost to complete, the WIP position, variations not yet claimed, labour against the estimate, debtor days, retentions, weeks of cash cover, forward work and one safety lead indicator.
What is the most important construction KPI?
For a builder running several jobs, forecast margin by job, because it combines cost to date, committed costs and cost to complete into one number that tells you where each job will finish. On its own it can hide a cash problem, so read it next to weeks of cash cover.
What's the difference between a construction KPI and a construction KPI dashboard?
The KPI is the number and its definition. The dashboard is where you see it. A dashboard is only as good as the data under it, so agree the definitions and fix where the data comes from before you build one.
How often should a builder review KPIs?
Job-level numbers weekly, business-level numbers monthly. Labour and committed costs move fastest, so they matter most week to week.
Can our accounting software produce these KPIs?
Partly. It holds cash, claims, payments and costs that have been billed. It usually doesn't hold contract values with variations, budgets, purchase orders, cost to complete or program dates, so most of these KPIs need the job or estimating system as well.
What should a project manager's KPIs be in construction?
Forecast margin and cost to complete for each of their jobs, committed costs not yet invoiced, variations raised against claimed, and labour hours against the estimate. These are the numbers a PM can change by acting on site the same week.
If you'd like these numbers every Monday without anyone building a spreadsheet, book a free initial chat and we'll talk through which systems hold the data today and what it would take to bring it together. If you want the whole process mapped first, our $5,000 Process & Systems Audit does that and gives you a written report.