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Indicators of a Best in Class Specialty Trade Contractor: Benchmarking KPIs to Evaluate, Achieve & Maintain Financial Health

Measure what you manage.

By Sam Nunez

This informative session started with a high-level review of financial statements, the KPIs used to benchmark results compared with industry peers, and how to determine if a company is a Best in Class performer.

Anthony Ivener, who facilitated the discussion, encouraged attendees to participate in CFMA’s Construction Financial Benchmarker to acquire the industry data needed to compare financial results with others in similar work classes and regions. KPIs like return on assets (ROA), return on equity (ROE), debt to equity, etc., can be used to determine Best in Class status for contractors at the top 25% of their peers. It’s important for management to use benchmarks to determine a company’s condition and performance, as this indicates strong leadership and leads to desirable results.

The conversation then took a deeper dive into internal KPIs as Michael Sardo discussed the use of KPIs like liquidity indicators, schedule variance indicators, work-in-progress (WIP) indicators, and backlog indicators. The WIP indicator discussion generated an interesting dialogue about what is used to determine labor productivity. This discussion was especially enlightening for subs, as they are the ones with the most boots on the project and labor is often their biggest cost item.

The overall theme of this session was the importance of measurement and benchmarking, which are critical to any CFM – whether at a high level for banks and sureties or drilling down using labor productivity KPIs to determine job performance. It is always important to remember to measure what you manage. 

This session was presented by Anthony Ivener, CPA, President of Ivener Management Group and Michael Sardo, CPA, CMA, CCIFP, Chief Financial Officer of W.L. Gary Company, Inc.

Sam Nunezis the Corporate Controller for the Marek Companies, Drywall Specialty Subcontractor in Texas and Georgia, where has worked for over 35 years. He joined CFMA’s Houston Chapter in 2007 just after earning his CCIFP credential, and has served in various committees and as Past Chapter President. Currently, he is on the ICCIFP Marketing Committee and is Co-Chairman of CFMA’s Specialty Subcontractor Committee. Also, he is serving as acting President of the IOFM APP2P Network Houston Chapter.