CONSTRUCTION BACKLOG REVENUE FORECAST, CONVERTING CONTRACTS TO CASH.
Backlog tells you what you owe and says nothing about when you owe it. A $3M backlog tells you what's signed. It doesn't tell you when it will be billed, how much will be billed each month, or whether the revenue profile matches the overhead structure of the business. Converting backlog to a monthly revenue forecast, burn rate by project adjusted for schedule risk, is what produces a 24 month cash position you can make decisions from.
The owner who knows their backlog but not their monthly revenue projection is making strategic decisions on incomplete information. Hiring, equipment purchases, and whether to chase the next contract all get decided off a single total that says nothing about timing. The owner with a 24 month revenue forecast built from burn rates makes those same decisions with two years of visibility. Same backlog, same business, and a completely different quality of decision, and the difference is one model built once and updated every month.
WHAT IT MEANS.
A backlog revenue forecast is a month by month projection of the billing expected from every signed contract, built from each project's burn rate and adjusted for schedule risk.
A $3M backlog is the total value of signed contracts that haven't yet been billed. Whether that $3M produces revenue this month, this quarter, or next year depends on when the work starts and how fast it gets billed. A contractor who signs three $1M contracts in October may not bill the first dollar on any of them until January. The backlog is $3M and the cash flow implication is zero until January.
The backlog revenue forecast is the foundation of the CFOS 24 month cash flow forecast. Every signed contract maps to its expected billing schedule and every overhead line maps to its monthly cost, which produces a month by month picture of the business for the next two years, with enough lead time to make strategic decisions before a lean stretch turns into a crisis.
WHAT THE TOTAL DOESN'T TELL YOU.
A signed contract isn't a billing schedule
Backlog tells you what you owe and says nothing about when you owe it. The total says what you sold and nothing about when it turns into an invoice. Managing cash flow from backlog means converting the total to a monthly revenue projection rather than treating it as funds available, and most contractors never do that conversion at all.
Optimistic start dates make the forecast dangerous
The most common backlog forecast error is assuming every project starts when the contract says it will. Permit delays, owner funding issues, other trades not finishing their scope, and weather all push start dates out. A forecast built on optimistic starts shows revenue that never materializes on time, and the owner signs new overhead commitments against it.
Nobody compares the profile to overhead
A monthly revenue projection is only useful sitting next to a monthly overhead figure. Months below overhead need line of credit coverage. Months well above it should be paying the line of credit down. Without that comparison, both kinds of month get treated the same way, and the surplus gets spent right before the lean stretch.
WHAT IT LOOKS LIKE IN DOLLARS.
The burn rate is the monthly billing expected from each active or upcoming project, based on scope, billing structure, and schedule. For a 6 month project that will bill $100,000 per month, the burn rate is $100,000 a month for 6 months. For a project starting in month three, the first $100,000 doesn't appear until month three. Sum the burn rates by month and you have a projected revenue profile.
Adding 2 to 4 weeks of schedule risk buffer to every project start produces a more realistic cash position. It also stops the owner from signing new overhead commitments against revenue that's 6 weeks behind schedule.
THE FOUR STEP PROCESS.
Include projects mobilizing this month, projects starting next quarter, and projects with signed letters of intent but uncertain starts. Separate the certain from the uncertain, because they behave differently in the forecast and mixing them makes the whole model hard to trust.
Base it on scope, schedule, and billing structure. Front loaded schedules of value carry higher early burn rates. Phased projects run uneven burn rates by phase. Map it month by month rather than dividing contract value by duration, because almost no project bills in equal slices.
Add 2 to 4 weeks to every project with an external dependency, whether that's a permit, an inspection, or another trade finishing its work. It's conservative and it's more reliable, and a forecast people trust is a forecast that gets used.
Monthly revenue projection minus monthly overhead equals projected monthly cash generation. Months that come in below overhead need line of credit coverage. Months well above overhead should pay the line of credit back down. That comparison is the whole reason for building the forecast in the first place.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| 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.
FREQUENTLY ASKED.
