BEST REVENUE YEAR EVER. CASH IS STILL TIGHT.
A busy construction year often ends with less cash than expected because revenue growth requires working capital investment, retention is still held, large project closeouts are pending, and overhead grew with the workload. The revenue was real. The cash is in AR, in retention, in work in progress, and in overhead that scaled with the business. A busy year doesn't automatically produce cash, and a managed year does.
The bank balance on December 31 is the worst single measure of a year like this. Four things are holding the money and three of them are only timing: invoices not yet collected, retention not yet released, and Q4 work with cost incurred ahead of billing. The fourth isn't timing at all. If overhead grew with revenue and margin didn't, the busy year produced more overhead rather than more profit. Running a WIP schedule at year end is what tells you which of the two you're looking at.
WHAT IT MEANS.
A busy year is one that moves more money through the business, and moving more money through is a different thing from producing more cash.
There are two forms of this problem and they need different responses. In a timing problem you have significant AR outstanding, retention pending, and projects in progress carrying margin, so cash is tight now and improves as Q1 collections come in, which makes the response aggressive AR collection plus patience. In a structural problem the projected profit doesn't match what the P&L shows even after you account for AR and retention, because overhead grew with revenue and margin per job came in below estimate. That second form of the year was genuinely less profitable than it looked at the revenue line.
THE FOUR PLACES IT IS SITTING.
Outstanding AR
A busy year means more invoices outstanding at year end. At a 60 day average collection, a $7M year has $1.1M in AR at any given time. On December 31 that AR is real and it's not in the bank yet, and it comes in during January and February, which makes this one a timing issue.
Retention held
More projects means more retention withheld. A $7M subcontractor at 10 percent retainage has $700K of earned, documented money held by GCs. At year end, projects that closed in Q3 may still have retention being processed, so the money is collectible and it just takes time to get it.
Work in progress, with costs ahead of billing
Projects that started in Q4 have costs incurred and limited billing, usually mobilization and early phases only. The margin on those projects is real and it won't be collected until Q1 and Q2. A busy Q4 creates a large WIP asset that doesn't reach the bank until next year.
Overhead that grew with revenue
A busy year often brings new hires, new equipment, and expanded office space. If that overhead growth wasn't matched by margin growth, the extra revenue produced extra overhead rather than extra profit. This is the one place on the list where the busy year was genuinely less profitable than it appeared.
WHAT IT LOOKS LIKE IN DOLLARS.
At a 60 day average collection, a $7M revenue year carries $1.1M in AR at any given time. On December 31 that's earned money sitting outside the bank account. It comes in over January and February, which is why the December balance reads worse than the year did.
A $7M subcontractor at 10 percent retainage has $700K of earned, documented money held by GCs. Some of it belongs to projects that closed in Q3 and is still being processed. It's collectible, and nobody collects it by waiting.
Run a WIP schedule as of December 31. Add cash on hand, AR outstanding, retention owed, and underbilled WIP, then subtract AP outstanding, overbilled WIP, and overhead obligations. That number is your true financial position rather than the bank balance.
WHAT MAKES NEXT YEAR DIFFERENT.
The forecast shows the Q4 tightness in September and not in December. A quarter of visibility is enough to change a hiring decision, a purchase, or a draw. That's the whole reason it gets run monthly instead of once a year.
The billing position on every project is known before year end rather than discovered in February. Underbilled work that can be billed before December 31 gets billed. Overbilled work stops looking like profit it was never going to be.
Every invoice over 30 days gets a call in October, November, and December. A personal call, not an email. That single habit moves more December cash than anything else on this list.
Every project that hit substantial completion in Q3 and Q4 gets pursued for release. The documentation goes out with the request rather than after the GC asks for it. Retention nobody chases sits until somebody chases it.
If overhead grew with revenue, the question is whether the growth is justified by margin improvement. Q3 is early enough to answer it and still change the fourth quarter. Answering it in April is an autopsy.
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.
| 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.
