Example P&L for a General Contractor
What a statement-built P&L looks like for a small remodeling contractor: three lumpy months, materials and subs split out, and a losing May that is not actually bad news.
- This example shows a two-crew remodeler banking $118,172.12 over the quarter, with a $24,910.09 April, a $4,542.09 loss in May, and a $12,167.28 June. Lumpy is the normal shape for this trade.
- Direct costs (materials plus subcontractors) run $74,702.42, or 63.2 percent of revenue, leaving a gross margin of 36.8 percent. Well-over-half direct costs are typical for contractors who sub out most trades.
- The May loss is timing, not trouble: May's materials and sub payments fed the job whose $46,125.40 of payments landed in June. Cash basis records money when it moves.
- The $20,000 transfer to savings is excluded, not expensed. Moving job money aside is the most common way contractor P&Ls understate profit by accident.
- Net income before owner draws comes to $32,535.28, a 27.5 percent margin for the quarter. The trailing view, not any single month, is the number that means anything.
- The numbers are fictional, but the format and the judgment calls are exactly what a reconciled statement-based P&L delivers.
Below is a complete example profit and loss statement for a fictional two-crew remodeling contractor, Cardinal Ridge Builders LLC, covering April through June 2026. Contractor statements are the messiest in small business (five-figure deposits, constant materials runs, sub checks, and owner draws in one account), so this example leans into the mess on purpose: one big month, one losing month, and a recovery, with every total computed from the lines so the document foots.
Use it two ways. If you are building interim financials for a bonding agent, a bank line, or big-job prequalification, this is the target format: one revenue line, materials and subs split out so gross margin means something, overhead below, and owner activity shown separately. The reading notes underneath explain the losing month, because a reader who understands cash-basis timing will not be alarmed by it, and a reader who does not will ask.
| INCOME | April | May | June | Total |
| Job payments | $53,846.72 | $18,200.00 | $46,125.40 | $118,172.12 |
| Total income | $53,846.72 | $18,200.00 | $46,125.40 | $118,172.12 |
| EXPENSES | April | May | June | Total |
| Materials (COGS) | $14,123.85 | $10,982.40 | $15,246.17 | $40,352.42 |
| Subcontractors | $11,500.00 | $8,600.00 | $14,250.00 | $34,350.00 |
| Insurance & bonding | $1,684.00 | $1,684.00 | $1,684.00 | $5,052.00 |
| Vehicle & fuel | $923.18 | $1,045.66 | $984.07 | $2,952.91 |
| Tools & small equipment | $489.12 | $213.55 | $1,562.40 | $2,265.07 |
| Phone & software | $216.48 | $216.48 | $231.48 | $664.44 |
| Total expenses | $28,936.63 | $22,742.09 | $33,958.12 | $85,636.84 |
| NET PROFIT | $24,910.09 | -$4,542.09 | $12,167.28 | $32,535.28 |
- Transfer to savings $20,000.00: Setting job money aside for taxes and the next material buy is not an expense. Counting it as one would understate profit badly.
- Owner draws $18,000.00: The owner's pay comes out as draws, which are equity movement, not a cost of running the business.
Line notes
- Job payments: Final payments, progress draws, and one deposit for a job starting in July. Cash basis: income when the check clears.
- Materials (COGS): Lumber yard, supply house, and box-store runs. Charges over a few thousand dollars get a confirming question (materials or tools) because the answer moves gross margin.
- Subcontractors: Checks to subs. Bare check numbers with no payee were confirmed from the check images, not guessed.
- Vehicle & fuel: Trucks, fuel, tolls, and dump fees. Constant small debits that become a real line by year end.
- Tools & small equipment: June includes a compressor and nailer replacement, flagged for the tax preparer to consider capitalizing.
The margin story a reader sees
Revenue for the quarter is $118,172.12. Materials cost $40,352.42 and subcontractors $34,350.00, so direct costs total $74,702.42, which is 63.2 percent of revenue. Gross margin is $43,469.70, or 36.8 percent. For a general contractor who subs out most trades, direct costs well over half of revenue are normal; a self-performing remodeler would usually show lower direct costs with the owner's labor hidden inside the margin.
Overhead (insurance and bonding, vehicles, tools, phone and software) adds $10,934.42, leaving net income of $32,535.28 before owner draws, a 27.5 percent margin on the quarter. No single month tells that story: April alone suggests a 46 percent business, May alone suggests a failing one. The quarter is the smallest honest unit for contractor numbers, and a trailing six or twelve months is better.
Why May shows a loss, in this example's own numbers
May banked only $18,200.00, a single progress draw, while the crews spent $10,982.40 on materials and $8,600.00 on subs building the project whose payments landed in June. The month shows a $4,542.09 loss. Nothing went wrong; cash accounting simply put June's costs a month ahead of June's revenue. Bonding agents and lenders who read contractor financials for a living expect exactly this shape, and the monthly columns disclose it instead of smoothing it away.
The check a careful reader actually runs is different: do materials and sub payments move roughly with job activity, a month or so behind deposits, while overhead stays level? Here insurance holds at $1,684.00 every month and vehicle costs stay near $1,000.00, so the answer is yes. Overhead drifting upward while deposits do not is the pattern that worries a reader, and this example does not show it.
What is deliberately NOT on this P&L
There is no job costing here. A statement-based P&L is company-level: it cannot say what the kitchen remodel made, only what the company made. Per-job margin needs invoice and timecard records. There is also no percentage-of-completion accounting; the July job deposit inside June's revenue is disclosed by the cash-basis note, and a conservative reader can mentally back it out.
The $20,000.00 transfer to savings and the $18,000.00 of owner draws sit below the statement. A contractor P&L that buries either inside expenses shows an artificially thin business, and the first reader who traces a 'expense' back to the owner's own savings account will distrust the whole document.
Use this format yourself
The free contracting business P&L template is this exact layout as a spreadsheet with the categories pre-loaded. For the full walk-through of categories, judgment calls, and what lenders ask a contracting business for, read the contracting business P&L guide. And to see a statement-built report with working charts and reconciliation detail, the full sample report is a complete delivered order for a different fictional business.
Common questions
Yes. The free contractor template below is this exact format as a spreadsheet with the categories pre-loaded. Or upload your statements and RapidPnL builds the reconciled version for you in minutes.
Not by itself. People who read contractor financials expect lumpy months, because cash basis puts costs ahead of the revenue they produce. What they check is whether the numbers reconcile to the statements and whether the trailing period is profitable.
Together they are your direct costs, and revenue minus direct costs is gross margin, the number worth watching in this trade. Mixing them into general overhead hides whether jobs themselves are priced right.
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Written by a licensed CPA. This guide is general information, not tax, legal, accounting, or financial advice, and does not create a professional relationship. Lender requirements and bank websites change; confirm specifics with your lender and financial institution.