WHY CIVIL CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Civil margin is lost to three specific things: the mobilization gap, the retainage stack, and iron that bills nothing. Civil subcontractors at $1M to $5M run 21 percent gross and 5.5 percent net, against CFOS targets at $1M to $5M of 23 percent gross and 10 percent net. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Civil subcontractors at $1M to $5M net 5.5 percent; the CFOS target at $1M to $5M is 10 percent. The distance between the trade average and the CFOS target isn't a pricing problem in this trade. It sits in the three mechanisms below, each of which moves margin without appearing as a failure on any single job. Civil work front-loads cash out. Fuel, bond premiums, moves, and payroll run 60 to 90 days before pay app 1 clears. On a $2M job that's $150K to $200K spent before the first dollar returns. Fix: mobilization on its own schedule-of-values line, billed on pay app 1.
THE MATH BEHIND THE MISSING CASH.
The Mobilization Gap
Civil work front-loads cash out. Fuel, bond premiums, moves, and payroll run 60 to 90 days before pay app 1 clears. On a $2M job that's $150K to $200K spent before the first dollar returns. Fix: mobilization on its own schedule-of-values line, billed on pay app 1.
The Retainage Stack
5 to 10 percent held on every job. At a 5.5 percent net margin, a 10 percent hold locks the entire job profit until release, and three concurrent jobs lock six figures while payroll runs weekly. Fix: retainage tracked as its own receivable class, releases calendared, working capital sized to carry it.
Iron That Bills Nothing
Ownership cost runs parked or working. Roughly $200 per day for a CAT 330 sitting still, with industry idle rates near 30 percent. Bids built without an ownership rate give that money away. A $7.1M civil contractor recovered $779K in three months once equipment cost stopped being buried. (cfos-job-profitability-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 21% | 23% | 25% |
| Gross margin, CFOS target | 23% | 23% | 25% |
| Net profit, industry average | 7% | 10% | 13% |
| Net profit, CFOS target | 10% | 11% | 14% |
| Overhead, industry average | 14% | 13% | 12% |
| Overhead, CFOS target | 13% | 12% | 11% |
Industry figures are Civil contractors' AVERAGE for each revenue band, not a floor. The CFOS net profit target is set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher, and the gross margin target is set at whatever gross margin produces that net profit once your overhead is paid, and never below your trade's own average. Gross minus overhead equals net on every column, so the rows tie out.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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