PLUMBING JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Plumbing 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 plumbing 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 plumbing 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.
Plumbing spends in two humps with a canyon between: underground and rough-in load the labor and pipe early, then the trade demobilizes while walls close and finishes run, then trim-out returns months later for fixtures and final. The. Together they're the trade's cash story, told in two pages that should cross-link as one arc.
WHAT MOVES MARGIN IN THIS TRADE.
The Two-Hump Canyon
Underground and rough-in spend the money; trim-out collects it, months later, behind punch and retainage. A flat percent-complete SOV starves the front and strands the back; phase-weighted billing is the trade's oxygen.
The Allowance Ambush
Fixture allowances reconcile at the end unless the contractor reconciles them in writing as selections land. Late selections, silent substitutions, and unpriced deltas are the finish line's favorite back-charges.
The Buried Evidence
Under-slab surprises get documented before backfill or they never happened. The photograph taken before the concrete truck arrives is worth more than the claim filed after it leaves. (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.
PLUMBING BENCHMARKS.
Plumbing subcontractors at $1M to $5M net 9 percent, against a CFOS target of 11 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.
