LOW VOLTAGE / AV JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Low Voltage / AV 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 low voltage / av 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 low voltage / av 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.
Cabling work bills against certification: fluke-test results per drop, labeled and documented to spec, and AV work bills against commissioning (systems programmed, tested, client-trained). Production that outruns testing and documentation is unbillable inventory in the ceiling, the same documentation-complete rule the fiber file proves at carrier scale.
WHAT MOVES MARGIN IN THIS TRADE.
The Undefined Drop
The trade sells by the drop, and an undefined drop (pull only, or pull-terminate-test-label-document?) makes every unit price a future argument. Define the unit, log the count, and added drops become change orders instead of favors.
The Untested Ceiling
Cable that's pulled but not certified is inventory, not revenue: billing rides the fluke reports and the label schedule. Documentation-complete is the collection strategy, per drop, daily.
The Subjective Punch
AV acceptance without written criteria means the job closes when the client's taste is satisfied, which is never on the contractor's calendar. Commissioning protocols with defined pass conditions are how integration projects end on paper. (cfos-cash-flow-cycle-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.
LOW VOLTAGE / AV BENCHMARKS.
Low Voltage / AV subcontractors at $1M to $5M net 8 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.
