NEGATIVE BANK ACCOUNT. HERE IS WHAT ACTUALLY MATTERS RIGHT NOW.
A construction company with a negative bank account isn't necessarily losing money. It may be winning jobs, executing well, and running 20% gross margins, while billing two weeks late, not following up on 60-day AR, and funding a GC's float out of its own pocket. Cash and profit are different things. Before assuming the business is failing, the first question is whether the negative cash is a timing problem or a structural problem. The fix is completely different.
There are only two answers, and the sorting takes minutes. A timing problem means the jobs are making money and the billing and collections work is behind, so the cure is operational and it works inside one or two billing cycles. A structural problem means the jobs themselves are priced below what they cost to build, so no amount of faster billing saves it and the cure is repricing forward work and cutting overhead. Owners who skip the sorting borrow against a problem they haven't diagnosed, which is how a bad month turns into permanent debt.
WHAT IT MEANS.
A negative bank balance in construction is usually a cash timing failure rather than a profit failure, because the work was earned and billed late while the money for it's still sitting with the GC.
The timing case looks like this. Billing lag is running 22 days. AR is sitting at 65 days average. The jobs are profitable, the crews are productive, and the bank is still empty because the business is financing everybody else's calendar. On $5M in annual revenue, cutting billing lag from 22 to 7 days and AR from 65 to 45 days recovers approximately $550K in cash timing. No new work, no new debt, no new customers.
The structural case looks different. Overhead is 28%. Gross margins are 18%. The jobs were bid below breakeven because the overhead rate inside the estimate was wrong, so every job won makes the hole deeper. Faster billing collects the loss sooner. It doesn't remove it. The cure is recalculating the overhead rate, rebuilding the estimate, and sometimes running less revenue to match what the business can carry.
Sorting the two takes one exercise. Run cost-to-complete on the three most active jobs. If all three project positive, this is timing. If two of three project negative, this is structural. The WIP schedule can hide the answer through overbilling, which is why the cost-to-complete work has to come from job cost data instead of from the P&L. Somebody who has done it before can call it in about 20 to 30 minutes.
WHERE THE MONEY GETS STUCK.
Civil and underground utility, the mobilization stretch
Civil contractors go negative on the distance between mobilization and first payment, which is 60 to 90 days of payroll and equipment cost on municipal work before a single check comes in. The business is profitable. The cash model was built on 30-day private cycles and the public work doesn't run on that calendar. The fix is forecasting the public pay cycle on purpose instead of borrowing through it every spring.
Concrete, material cost that stacks in one month
Concrete subs go negative where material concentrates. Three pours in one month generate three ready-mix invoices that come due before any of the pay apps covering those pours get collected. That's a scheduling artifact and not a business failure. Mapping procurement timing against the billing calendar prevents it, because the pours can be sequenced against when the money comes back.
Electrical, work performed and never invoiced
Electrical negatives usually trace back to unbilled time-and-material work and change orders, where the cost went out and the revenue was never invoiced at all. A negative balance can be covering $200K of earned but unbilled scope sitting in a project manager's notebook. That's why the diagnosis on an electrical contractor always starts with the change order log before it touches the bank statement.
Any trade that's growing fast
Growth multiplies every cash delay the business already had. A sub growing 40% year-over-year is funding 40% more float, which means more payroll before billing and more material sitting in receivables. Going negative in a fast growth year means the working capital never scaled with the revenue. That's a planning failure rather than a profitability one, and it's the most common one we see.
WHAT IT LOOKS LIKE IN DOLLARS.
A $6.7M civil contractor with a maxed LOC and recurring negative balances had $309K in the bank within 30 days. No new revenue and no new debt. The diagnosis was cash timing, meaning late billing and uncollected AR, so the operational fix released money the business had already earned and never collected.
First, is gross margin healthy on a percentage-of-completion basis? Second, is AR aging past 60 days? Healthy margin plus aged AR is a timing problem with an operational fix. Thin margin plus current AR is a profit problem that needs pricing and overhead correction. The two answers point at completely different responses, which is why guessing is expensive.
A company managed off the bank balance treats every negative week as a surprise. A company running a 13-week forecast sees the dip eight weeks out, while accelerating one pay app or moving one AP payment still prevents it. The forecast doesn't create cash. It creates the lead time that makes cheap moves possible.
WHAT TO DO THIS WEEK.
Pull the AR aging. Every invoice more than 15 days old without a follow-up gets a call now. The fastest cash in any business is in the 30 to 60 day AR bucket, and most of it will come in within 5 to 10 days of a professional follow-up call. This is the first action rather than a later one, because it costs nothing and it works.
If any projects have a GC billing cutoff in the next 10 days, get those invoices submitted today. A missed cutoff costs 30 days of additional cash delay. On a $150K invoice, that's 30 days of float that could have been cash this cycle instead of next quarter, and nobody gets that month back.
An MCA at 50 to 80% effective annual interest compounds a cash problem instead of fixing one. Before going to an MCA lender, work out whether the problem is timing, in which case you fix billing and collections first, or structural, in which case an MCA only extends the runway before the same crisis returns. MCAs are rarely the right first step and they're the least reversible one.
If a specific invoice is critical and it sits in the 45 to 60 day range, a direct call from the owner to the GC principal, not the PM, often accelerates payment. GC principals want their subcontractors financially healthy. A professional conversation about payment timing isn't a relationship risk. It's how good business relationships work.
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.
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