DRYWALL JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Drywall subcontractors have no cash left 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 drywall contractor research. Most are 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 drywall 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.
WHERE IT LEAKS OUT.
Drywall mobilizes after MEP rough-in and before finishes. So it gets every upstream delay with none of the float. Short hang-and-finish windows mean overtime and stacked crews the unit price never priced.
5 to 10 percent is held on every draw. Drywall finishes close to project end, so release waits on everyone's punch list as well as its own.
WHAT MOVES MARGIN IN THIS TRADE.
The Flashlight Tax
When someone judges your finish under the wrong light, you do free rework. If the contract doesn't set the inspection standard (permanent lighting, perpendicular view), every punch walk is a negotiation you lose.
The Damage Economy
Drywall pays back-charges and causes them, and most subs track neither side. Charges of $500 and $3,000 go by untracked, job after job. That's where the margin between 6 percent actual and the 10 percent CFOS target goes.
The Middle Squeeze
Drywall gets every upstream delay with no float, and pays for it in overtime and stacked crews. At 19 percent gross margin, the thinnest in the interiors group besides framing, compression cost you don't document and bill is margin you give to the schedule.
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 | You can get here on the days you control. Bill on time, send complete paperwork, and follow up in week two. |
| Strong | 30 days | Takes work every month. It's the cheapest money you can get. |
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 costs no interest and needs no bank. So we fix billing and collections before we talk about financing.
DRYWALL BENCHMARKS.
Drywall subcontractors at $1M to $5M net 6 percent, against the CFOS net profit target, set at your trade's net profit average at your revenue plus 3.5 points, never below 10 percent, before taxes. The working capital target is 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
