The Numbers a Trades Business Should Actually Watch

The vans are out every day. The team is flat tack. You have not had a proper weekend since autumn.

And yet the bank balance does not look like a business that busy should look. That is a horrible feeling, and it is almost always caused by the same thing: the numbers that would explain it are scattered across a job system, Xero, a diary and somebody's head, so nobody has ever put them side by side.

Why revenue is the wrong number to watch

Revenue is the number everyone knows off the top of their head, and it is close to useless on its own.

A busy month at thin margins can leave you with less cash than a quieter month of well-priced work. Revenue also arrives late. By the time you see a bad month in the accounts, it happened six to eight weeks ago, and you cannot do anything about it.

The numbers below are more useful for two reasons. They tell you why rather than what, and most of them move before the money does, which gives you time to react.

The numbers that actually tell you something

You do not need all of these. Pick the few that match what you are worried about.

Quote to job conversion

Of the quotes you send, how many turn into work?

This is the most under-watched number in the trades and often the most profitable one to look at. If you win 3 in 10, quoting is a big cost with a small return, and it is worth asking why: too slow to respond, priced wrong for the market, or quoting for jobs you were never going to win.

If you win 9 in 10, that sounds great until you consider you might be too cheap. Most healthy trades businesses sit somewhere in the middle.

Time to quote matters just as much. The business that replies within a day wins a lot of work purely by turning up first, which is the same reason being easy to find and contact online pays off.

Average job value

Total invoiced divided by number of jobs.

Watch the trend more than the number. A slowly falling average usually means you are taking on more small callouts that eat a day and pay for half of one. Nudging this up, by bundling work or being a bit choosier, is often easier than finding more customers.

Billable hours

Of the hours you pay for, how many end up on an invoice?

This is the one that explains the "busy but broke" feeling better than anything else. Travel between jobs, going back for materials, quoting, paperwork and waiting on site are all real hours that no customer pays for.

You will never hit 100 percent, and you should not try. But if you are down around half, there is usually a specific and fixable cause, like too much driving because jobs are not grouped by area, or two trips to the merchant because nobody checked the van.

Work in progress and unbilled work

Work you have completed but not yet invoiced.

This is money you have already spent wages on and have not asked for. In a lot of small trades businesses it is a surprisingly large number, and it is the single fastest cash win available: invoice sooner and the money simply arrives sooner.

If you cannot answer "how much finished work is sitting uninvoiced right now" in ten seconds, that is worth fixing first. It usually points at a gap between the job system and the accounts, which is what connecting Xero to the rest of your business is about.

Debtor days

How long, on average, customers take to pay you.

If your terms are 20th of the following month and your real average is 55 days, you are financing your customers' businesses out of your own account. Watching this monthly, and chasing early rather than politely late, changes cash flow faster than almost anything else you can do.

Booked work for the next fortnight

How many days of confirmed work are in the diary.

Everything else on this list looks backwards. This one looks forwards, which makes it the number that actually lets you act. When it starts thinning out you still have two weeks to do something: chase quotes, ring past customers, push a bit harder on marketing.

Most trades businesses notice a quiet patch when it arrives, which is exactly too late.

Callbacks and rework

How often you go back to a job you have already finished.

Every callback costs you twice: the wages to fix it and the margin you never charged for. A creeping callback rate usually points at one product, one process or one part of the team, and it is very hard to see without counting.

Where these numbers already live

The good news is you are almost certainly already collecting all of this. It is just scattered.

• Your job or quoting software knows quotes sent, jobs won, hours logged and callbacks.
• Xero knows invoiced totals, what is unpaid, and how long people take to pay.
• Your diary or scheduler knows what is booked in the next fortnight.
• Payroll knows the hours you actually paid for.

The work is not collecting the data. It is bringing four systems into one view so you can see them together, which is the whole idea behind where your business data actually lives.

Plenty of people start by pulling it into a spreadsheet once a month, and that is a perfectly sensible first step. It stops working when the spreadsheet takes half a Sunday and is out of date by Tuesday, which is the point where a real dashboard starts to earn its keep.

Start with three, not ten

A wall of numbers gets ignored within a fortnight. Pick three, look at them weekly, and add more only once those have changed a decision.

If we had to choose for a typical NZ trades business, we would start with:

1. Booked work for the next fortnight, because it is the only one you can still act on.
2. Unbilled completed work, because it is usually the fastest cash in the door.
3. Quote to job conversion, because it quietly determines everything else.

Then set a couple of alerts so the urgent things find you rather than waiting for you to check. An invoice going past due or the diary thinning out are both better as a notification than as a discovery. There is a broader version of this thinking in the numbers every business should see every morning.

What to realistically expect

The first honest look is often uncomfortable. Most owners find their billable hours are lower than they assumed and their debtor days are longer. That is normal, and it is the point.

Expect the first month to be about getting the numbers trustworthy rather than acting on them, because you will find disagreements between systems. Once they settle, the value is not the dashboard itself. It is the small decisions it changes: quoting a bit differently, invoicing on Wednesday instead of whenever, grouping jobs by suburb, ringing a customer two weeks earlier.

None of those are dramatic. Together, over a year, they are the difference between busy and profitable.

Let's get your numbers in one place

If pulling these together sounds like a job you will never get to, that is exactly the sort of thing we take off people's hands.

At Automate Workflow we connect job systems, Xero and calendars into one clear view for New Zealand trades businesses, so the numbers that matter are on one screen and the urgent ones come and find you. Have a look at our dashboards and analytics work or get in touch for a free, no-obligation chat about what you should be watching.