TELECOM JOBS LOOK PROFITABLE. THE ACCOUNT IS STILL EMPTY.
Telecom 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 telecom 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 telecom 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.
Same carrier-calendar economics the fiber file documents (unit-price MSAs, closeout-audit payment gates, 56-day industry average), applied to ticket volume: a hundred small unbilled tickets is the same receivable as one big one, harder to see. Telecom's version of documentation-complete billing is ticket-close discipline: photos, sign-offs, and closeout packages per ticket, daily.
WHAT MOVES MARGIN IN THIS TRADE.
The Windshield Tax
Many crews, many tickets, one number that decides everything: billable hours per crew-day. Drive time, staging, and access failures eat it invisibly until utilization is tracked per crew, per week.
The Hundred Small Receivables
Carrier MSAs pay per ticket against closeout documentation, and a hundred unbilled tickets hide easier than one big invoice. Ticket-close discipline (photos, sign-offs, packages daily) is the collection strategy.
The Blended Book
Maintenance pays small and steady; projects pay big and slow. One P&L over both hides which side funds which, and the owner prices both wrong until the split is on paper. (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.
TELECOM BENCHMARKS.
Telecom 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.
