CIVIL JOBS LOOK PROFITABLE. THE ACCOUNT IS STILL EMPTY.
Civil subcontractors run out of cash for reasons specific to how the work is built and billed, on jobs that are making money. The three that cost the most in this trade are below, taken from civil contractor research. Most sit at 75 to 90 days from finishing work to holding the money, and 45 days is achievable.
Cash and profit are measured on different clocks. Your profit and loss records revenue when you invoice and costs when you incur them, while the bank account only knows what cleared. Labour goes out weekly and collects 45 to 90 days later, minus retention. That distance is what a growing, profitable civil company funds out of pocket, and it widens as you grow. The specific things that widen it in this trade are what the rest of this page is about.
IN THEIR OWN WORDS.
You don't get paid if he doesn't get paid. You just know he's going to tell you he didn't get paid.
Mike Holt forums, contract issues thread
These GC's are trying to hire you but want you to chase the money.
Mike Holt forums, billing thread
WHERE IT LEAKS OUT.
Obligations that don't call to collect get paid last. Payroll taxes are trust funds; slipping them brings penalties, personal liability exposure, and bonding damage. When these slide, the problem is never administrative. It's a cash imbalance upstream.
WHAT MOVES MARGIN IN THIS TRADE.
The Mobilization Gap
Civil work front-loads cash out. Fuel, bond premiums, moves, and payroll run 60 to 90 days before pay app 1 clears. On a $2M job that's $150K to $200K spent before the first dollar returns. Fix: mobilization on its own schedule-of-values line, billed on pay app 1.
The Retainage Stack
5 to 10 percent held on every job. At a 5.5 percent net margin, a 10 percent hold locks the entire job profit until release, and three concurrent jobs lock six figures while payroll runs weekly. Fix: retainage tracked as its own receivable class, releases calendared, working capital sized to carry it.
Iron That Bills Nothing
Ownership cost runs parked or working. Roughly $200 per day for a CAT 330 sitting still, with industry idle rates near 30 percent. Bids built without an ownership rate give that money away. A $7.1M civil contractor recovered $779K in three months once equipment cost stopped being buried. (cfos-job-profitability-system) ---
DAYS SALES OUTSTANDING.
Ninety days is weak, 45 is the target, 30 is strong. Nothing else moves cash faster.
| Position | Days | What it means |
|---|---|---|
| Weak | 90 days | Roughly three months of work funded out of your own pocket. |
| Target | 45 days | Achievable on the days you control: submission timing, complete documentation, follow up in week two. |
| Strong | 30 days | Requires discipline every month, and it's the cheapest capital available to you. |
Moving from 90 days to 45 frees roughly annual revenue divided by 365, times 45 days. At $4M that's about $493,000. At $8M it's about $986,000. That money doesn't come from a bank and it costs no interest, which is why we work the cycle before discussing financing anything.
CIVIL BENCHMARKS.
Civil subcontractors at $1M to $5M net 7 percent, against a CFOS target of 10 percent, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. Working capital should sit at 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
