The short answer. Check leading numbers, not last month's P&L. Four weekly reads, one for each of the Four Capacities: labor productivity utilization against the 80 percent standard, fixed obligation coverage against current gross margin dollars, Days of Working Capital remaining, and designed versus actual throughput. Each tells you what the business has to do next.
Why the P&L Is the Wrong Weekly Report
Revenue last month, gross margin last quarter, net income year to date. Every one of those is a lagging indicator. Accurate, and late. By the time a problem shows up there, it has already cost you a month.
Owners who run on the P&L are steering with the rearview mirror. Every business has four capacity ceilings. The weekly scorecard should tell you how close you are to each one.
The Four Weekly Reads
- Labor productivity utilization. Billed hours divided by paid hours, against an 80 percent standard. This is Labor Capacity. It is the fastest number to slip and the fastest to fix.
- Fixed obligation coverage. Current gross margin dollars against total fixed monthly obligation, overhead plus debt service. This is Fixed Cost Capacity. It tells you whether this month is carrying its weight.
- Days of Working Capital. Cash plus available credit divided by average daily cost of operations. This is Working Capacity. It tells you how many days the business can fund if revenue stopped.
- Designed versus actual throughput. Jobs, loads, or units the shop, fleet, or location is built to run this week, against what it actually ran. This is Physical Capacity.
What One Number Is Worth
Take a 22-person shop that paid 880 hours last week and billed 634 of them. Utilization was 72 percent. Eight points under the 80 percent standard is about 70 hours.
At a $95 billed rate, that is about $6,650 of billable capacity the shop paid for and did not sell. That is the total across the shop for one week, not a per-person number. Over a year, it is the difference between a good year and a tight one. And you only see it if you look every week.
How to Run the Scorecard
- Same day, every week. Monday morning, for the week that just closed.
- One page. Four numbers, this week and the last four weeks. Trend matters more than any single week.
- One owner per number. Someone on your team is responsible for producing each read and explaining any move.
- Monthly, add the floor. Once a month, check gross margin dollars to date against Minimum Mandatory Profit. That tells you whether the month is on pace to clear.
Where the Weekly Read Stops
A weekly scorecard tells you which capacity is getting tight. It does not tell you why, or what the right fix is for your business. That is the job of a full diagnostic. Return to Owner reads the business continuously and turns those signals into what to do next.
Frequently Asked Questions
Can my bookkeeper produce these numbers?
Some of them. Days of Working Capital and fixed obligation coverage come from accounting data. Utilization and throughput usually come from your scheduling, time tracking, or dispatch system. Ask for both sides.
What if I do not bill by the hour?
Measure productive hours against paid hours anyway. Hours spent on customer work that generates revenue count as productive. The 80 percent standard still applies.
Why not just watch cash in the bank?
The bank balance is a single snapshot that moves with timing. Days of Working Capital compares cash to what the business actually spends per day, which tells you whether the balance is enough.
How long before the scorecard is useful?
Four weeks gives you a trend. Twelve weeks gives you a baseline. You will see problems in the first month that the P&L would not have shown you for another quarter.