CONCRETE: AR AND THE FACTORING TRAP
Concrete's receivables age like every sub's, and the desperate version of the fix (invoice factoring, merchant cash advances) converts a timing problem into a margin hemorrhage.
This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the concrete operating system page.
WHERE THE MONEY GOES.
Concrete's receivables age like every sub's, and the desperate version of the fix (invoice factoring, merchant cash advances) converts a timing problem into a margin hemorrhage. The site already tells the counter-story with real numbers: a $4.9M concrete contractor went from $161K to $1.1M net once the control system replaced the debt spiral.
THE COST, SOURCED.
Kasey / a verified concrete client, $4.9M concrete, $161K to $1.1M net. (Verified client story, CONTROL Ch1)
THE NUMBER TO MEASURE IT AGAINST.
Concrete contractors have about 7% net profit at $1M to $5M, rising to roughly 9% at $5M to $10M. The CFOS net profit target is 10.5% before taxes at $1M to $5M, the trade's average plus 3.5 points, never below 10%. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.
Gross margin over the same bands is 21% to 22%,against CFOS targets of 23.5% and 24.5%.
THE SYSTEM THAT FIXES THIS.
The 13 week forecast, and a funding decision made before the week starts.
FREQUENTLY ASKED.
