How a $4.9M Concrete Subcontractor Collected $203,000 in 7 Days — Without a Single New Job

The owner of a $4.9M concrete subcontracting company called us because he was frustrated. Business was good — crews were busy, the backlog was healthy, and the P&L looked fine. But the bank account never seemed to reflect it. He couldn’t figure out where the money was going.

We figured it out in about a week.

He had $203,000 sitting in overdue accounts receivable that nobody was actively collecting. Not stolen. Not lost. Just sitting in invoices that had been submitted and then forgotten — some of them 90, 120, even 150 days old. He had assumed his GCs were slow payers and had stopped following up. In reality, several of those invoices had been approved and were just waiting on a phone call.

Within 7 days of engagement, we collected $203,000. No new jobs. No new revenue. Money that was already his, already earned, just not in his account.

That’s where most concrete subs are bleeding — not on the jobs, but in the back office.

The Overhead Problem Nobody Was Watching

Collections was only part of it. The bigger issue was that his overhead had been miscategorized for years.

He believed his overhead rate was around 5% of revenue. That’s what he’d been using to price jobs. That’s what his estimates were built on. The actual number was 12%.

That 7-point gap doesn’t sound catastrophic until you run it through a $4.9M revenue base. At 5% overhead, he thought he needed to cover about $245,000 in overhead annually. His actual overhead was closer to $588,000. He had been underpricing every single job for years — and making it work only because his volume was high enough to paper over the gap.

When we corrected the overhead allocation and rebuilt his estimating model around the real number, two things happened. First, his bids got more accurate. Second, he started winning fewer jobs — but making more money on the ones he won.

More Profit on Less Revenue

In the year after we fixed his financial system, he did $1.3M less in revenue and made more net profit in actual dollars.

That’s not a typo. Less work, more money.

Here’s why it happens. When your overhead rate is wrong, you’re effectively subsidizing your GC’s project with your own margin. You win the bid because you’re cheap — not because you’re efficient. You stay busy. You look successful. But at the end of the year, there’s nothing left.

When the overhead is correct and the pricing reflects it, you lose some bids. The ones you lose were the ones that were going to cost you money anyway. The ones you win actually produce margin.

His crew was the same. His equipment was the same. His GC relationships were the same. The only thing that changed was that he finally knew what his jobs actually had to make to keep the business healthy.

What Most Concrete Subs Miss: The AR Aging Report

Every concrete subcontractor has accounts receivable. Most of them look at the total number and feel okay if it’s not growing too fast. Almost none of them are actively managing aging — breaking AR down by how old each invoice is and following up systematically on anything past 45 days.

A basic AR aging process looks like this. Every Friday, pull a report that shows every open invoice sorted by age — current, 30 days, 60 days, 90 days, 90+. Anything past 45 days gets a call or an email that week. Not a passive reminder. An actual follow-up that asks when the check is cutting.

That process alone — consistently applied — is worth tens of thousands of dollars a year for most concrete subs doing $3M or more.

December Looked Different That Year

At the end of the year, the concrete sub paid out $130,000 in profit sharing to his crew.

He had never been able to do that before. Not because he didn’t want to — because he genuinely didn’t know the business could support it. The money was there in prior years. It just wasn’t visible.

Same business. Same crews. Same GCs. Better system.

If you’re a concrete subcontractor and your bank account doesn’t match what your P&L says, the problem almost always lives in AR that isn’t being collected or overhead that isn’t allocated correctly. Schedule a free call at constructioncfo.net to look at your numbers together.