Monthly Mission: Making Sure You Are On Track!

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Monthly Mission: Making Sure You Are On Track!

May 5, 2019      In Monthly Mission No Comments

Are you on track to hit your 2019 goals? 

May is the month to do a checkup of your financial performance to check your progress. 

Why May?  May is a shoulder month.  It’s past the first quarter but it hasn’t gotten CRAZY busy like the summer months.  We now have 1/3 of the year behind us so at this point we can typically tell the type of year it is going to be based on: 

  • Q1 is behind us, which tends to be our lowest performing quarter. 
  • Backlog should be established for a good portion of the rest of the year. 
  • The previous year-end is complete and we know what we need for taxes, working capital, etc.
  • There is enough time left in the year tmake adjustments and get back on track.   
  • By waiting until the end of summer, it will be largely too late to impact the year so May is a great time to assess and adjust. 

Your mission for May is all about assessing where you are and comparing it to your goals for the year.  

(Many of you have already completed this step with our financial forecasting tool and a meeting.  If you have or yours is scheduled, you can stop here and take a breath.)   

If you’re doing this assessment on your own, here are a few items that I like to review and think about.  As you are going through this exercise be sure to consider how the company will look at year end, not just how it looks today.  Here are the items to gather: 

  • Income Statement – Year-to-date and compared to prior year 
  • Income Statement – Comparison to overhead budget 
  • Balance Sheet – Comparative if you have it 
  • Work-in-process job schedule and backlog list 
  • Compliance/covenant requirements for debt or surety 

All items will need to be for the same, most recent, month-end (March or April is what I use).  I’m making the assumption that you have an overhead budget, your financial statements and job schedules are complete and accurate and you have financial performance goals for the year.  Now for the items to review and what to look for: 

Income Statement review: 

  • How does your overhead budget compare to actual spending?
  • How is your total revenue versus goal revenue? 
  • Are you on track with your gross profit versus your goal gross profit?
  • How do the above items compare to your prior year?

Balance Sheet review: 

  • Calculate key ratios 
    • Current Ratio 
    • Working capital 
    • Debt to Equity 
  • Review status of bank covenants or surety requirements and assess compliance 
  • If available, compare to the prior year 

The next part of the mission is to assess, adjust and plan so that you can meet your goals. 

We have found that if we do this assessment in May, we can still hit our goals and requirements for the year but if we wait until after summer, there isn’t enough time left in the year to change the trajectory.  Additionally, if there are items to tweak, we have the mass of summer work that we can use to meet our expectations.  As you are doing your assessment, here are some areas to consider: 

  • If Q1 was slower than expected, what will it take to make up the shortfall? 
  • How does backlog look in relation to dollars needed to: 
    • cover overhead? 
    • make net income? 
    • maintain cash flow? 
  • If Q1 was strong and backlog is heavy, when can we be selective in our workload? 
  • Are there jobs that have the potential to pick up margin that impacts the bottom line? 
  • What jobs have risks that need additional planning to ensure success? 
  • Will significant additional backlog be added between now and year-end? 
  • Do any overhead budgets need to be adjusted to be more accurate? 
  • Are there overhead items that could be adjusted down based on savings? 

This Assessment will take some time so make sure you have your information as accurate as possible. 

Doing a detailed analysis of your financials can feel overwhelming if you are doing it without the right tools or software, which is why we have used Shane’s forecasting model for over 15 year to assess and plan for all of the above items.  There is only so much time to devote to financial information when you have a business to run, so we developed the model to help us review, adjust and plan the future and then get back to work.   

To learn more about our model, please email us at 

If you’d like a refresher on some related topics above, check out the Budgets section, the financial statement packages section or the job schedule section in the All Access Portal. 

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