WHY ELECTRICAL CONTRACTORS RUN OUT OF CASH.
Electrical contractors run out of cash because gear ties up money and work types get mispriced. Switchgear and panels are ordered with deposits and long lead, paid months before billing. Underground, rough-in, and trim have different margins, so without work-type job costing you lose good bids and win money-losers. Prevailing-wage burden is understated. The job profits while the cash is buried.
Electrical carries two cash problems most owners never separate. First, the gear: switchgear, panels, and large wire orders carry deposits and long lead times, so you commit and pay months before the material is installed or billed. Second, work-type margin blindness: underground, rough-in, and trim are genuinely different businesses with different margins, and without job costing by work type you overprice the work you should win and underprice the work that loses money. Add prevailing-wage and certified-payroll burden on public jobs, routinely understated, and the income statement shows a profit it has not really earned. CFOS separates the work types and structures the gear buyout.
WHY ELECTRICAL WORK EATS CASH.
Electrical is a gear-heavy, labor-complex trade, and both ends tie up cash. Switchgear, panels, gear, and large wire packages are ordered with deposits and long lead times, which means you pay for major material months before it is installed and can be billed. On a sizable project that is a large commitment sitting on your cash and your line of credit with nothing coming back yet.
The quieter killer is work-type margin blindness. Underground, rough-in, and trim each carry different labor productivity and different margins, and most electrical subs track the job as one number instead of by work type. So you overprice the work you should be winning and underprice the work that quietly loses money, and you never know which is which. Add prevailing-wage and certified-payroll burden on public work, which is high and frequently understated, and you have a trade that looks profitable on the P&L while the bank account stays tight.
THE MECHANISMS NO ONE PRICES IN.
You pay for switchgear months before you bill it.
Switchgear, panels, and large wire are ordered with deposits and long lead times, so major material is paid for months before installation and billing. That commitment sits on your cash and line of credit with no revenue against it, and it never appears as a job cost on the income statement.
Underground, rough-in, and trim are different businesses.
Each work type carries different labor productivity and margin. Tracked as one job number, you cannot see which is profitable, so you overprice the work you should win and underprice the work that loses money. The blended job hides both, and the mispricing repeats on the next bid.
Public-work labor costs more than base wage.
On public and prevailing-wage jobs, certified-payroll requirements and the prevailing-wage burden push labor cost well above base wage. Tracked at base wage, that burden is understated, and you bid public work that does not actually carry the margin you think.
THE WRONG DIAGNOSIS COSTS YOU YEARS.
Wrong answer 1: copper and gear prices. Material cost matters, but the bigger drain is financing the gear buyout for months and mispricing your work types.
Wrong answer 2: we are getting underbid. Sometimes you should lose that bid. Without work-type costing you cannot tell a bad loss from a good one you were right to walk away from.
Wrong answer 3: the GCs pay slow. They do, which is a timing problem to structure around, not the reason a profitable-looking company is short on cash.
The real answer: there is no job costing by work type, the gear buyout is unstructured, and prevailing-wage labor is under-burdened. CFOS fixes all three.
SAME BUSINESS. BETTER SYSTEM.
CFOS is the Construction Financial Operating System. For electrical contractors it installs as a set of specific deliverables, not advice:
FLAT MONTHLY FEE. NO SURPRISES.
Two tiers based on trailing 12-month revenue. No hourly billing. No payroll. No add-ons. Everything included in the flat monthly fee.
| Revenue | Core Financial | Executive Financial |
|---|---|---|
| Under $1M | $1,900/mo | $2,900/mo |
| $1M–$3M | $2,600/mo | $3,600/mo |
| $4M–$6M | $3,800/mo | $5,500/mo |
| $7M–$9M | $5,100/mo | $6,900/mo |
| $10M–$12M | $6,100/mo | $8,500/mo |
| $13M+ | Quoted | Quoted |
FREQUENTLY ASKED.
