Pull your AR aging report. Find every invoice that's 30+ days old and past its payment term. For each one: is there documentation in place? Has there been a formal written follow-up? Is a lien notice warranted? The fastest cash in your business is almost always already earned — it's sitting uncollected. Make a list of every account where a call, a formal demand, or a lien notice could move cash in the next two weeks.
Do not wait until an invoice is past due to call a supplier. Call before the due date, acknowledge the situation, offer a specific partial payment — even $5,000–$10,000 shows good faith — and give a specific date for the balance. "We have a large AR collection expected on the 15th. Can we do half now and the balance by the 20th?" Most suppliers extend for an owner who calls proactively. None extend for an owner who goes silent.
Not all AP is equal. Separate payables into: must pay now (payroll, taxes, anyone who can shut down a job), can extend 30 days with a call (most material suppliers), and can defer 45–60 days without significant relationship damage. Pay the first bucket. Call on the second. Let the third wait — but document it and follow up proactively.
Cash crunches in construction are almost never random. They're the predictable output of one or more structural problems. Fixing the crisis without fixing the cause means doing this again in 60–90 days — except the relationships will be more damaged and the options will be fewer.
Invoices are out but not being collected systematically. No written 30-day follow-up. No formal demand at 45 days. No lien rights being exercised. The cash is owed — it just isn't moving.
Work is complete. The cost is in the account. But the pay app hasn't been submitted — missing documentation, missed billing cutoffs, T&M work waiting on formal approval. The money exists. It just hasn't been asked for.
The business grew. Overhead grew faster. Jobs were priced at 12% overhead when the actual rate is now 17%. Every job ships with a built-in loss. The P&L shows net income while the account empties.
The fourth cause — high-cost debt: An MCA or high-interest LOC with daily or weekly repayment is compounding every other problem. The daily draw is pulling cash out before suppliers can be paid. In this situation, collecting AR fast enough to retire the debt becomes the single priority — everything else is secondary.
Act immediately in this order: audit AR for anything collectable in 14 days, call suppliers before invoices are due with a specific partial payment and timeline, triage AP into must-pay now / extend / defer, and identify the root cause. Never go silent on a supplier — a proactive call holds relationships that silence destroys.
Call before the due date. Acknowledge the situation directly. Offer a specific partial payment and a specific date for the balance — not "as soon as possible." Most suppliers will extend 30–45 days for an owner who is proactive, honest, and offers something concrete. Vague timelines and silence get accounts put on hold.
The most common causes: AR aging past 60 days, underbilling (earned revenue not invoiced), overhead rate above what jobs are recovering, or high-cost debt pulling daily repayments. Most contractors experiencing this have at least two of these running simultaneously. Schedule a call — SPM moves fast and the first thing we do is find the cash that's already there.
The first thing SPM does is find the cash that's already there.
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