There’s an old line in construction that more contractors go under from growth than from a lack of work. It sounds paradoxical until you look at when money moves.
The timing stack
On a typical job, a contractor:
- Pays crews every week from the start.
- Buys materials before they’re installed and long before they’re paid for.
- Bills monthly through a pay application.
- Waits for review and approval, then for payment, often weeks later.
- Has a share of every payment held back as retainage until the end.
Each step is normal. Stacked together, they mean the contractor is financing a substantial part of every job. Win two big jobs at once, and the gap doubles before the first draw arrives.
Why profit hides it
The profit and loss statement records revenue as work is completed. The bank account records cash when it arrives. On a growing contractor’s books, those can be months apart. The WIP schedule helps, because over- and under-billing show whether billing is keeping pace with work, but it still doesn’t tell you which week gets tight.
The habit that closes the gap
The contractors who manage this well tend to share one habit. They look at cash weekly, thirteen weeks ahead. They know which owner pays in 30 days and which in 60. They track retainage as its own receivable with its own date. They know the pay application deadline for every job. And when they see a tight week coming, they act weeks in advance by pushing an approval, staging a materials order, or drawing on the line before it’s urgent.
It doesn’t require sophisticated tools to start. Our step-by-step guide and template are enough for a first version.
Where software helps
As the business grows, keeping the forecast honest by hand gets harder. PursuitBid builds the thirteen-week view from imported receivables, payables, and payroll, keeps collection assumptions explicit, and lets you test a new crew or a delayed draw as a scenario without touching the plan.
Written by Syntonyl team. This article is general information, not legal, tax, or financial advice.