THE FINANCIAL SYSTEM THAT WORKED AT $2M BREAKS AT $5 MILLION.
Construction subcontractors growing past $5M in revenue face a predictable set of financial system failures: overhead grows with every hire but the rate in bids doesn't update, several cash holes open at once as more jobs start, AR builds faster than the collections system can handle, and WIP reporting becomes required for bonding conversations that weren't necessary at $2M.
None of the four are growth problems. They're system problems that growth exposes. The same informal collections habit that worked on eight invoices a month can't work on twenty five, and the same overhead rate that was close enough with one PM is wrong by six points once four salaried people are on the books. What changes at $5M is that being approximately right stops being cheap. Six points on $5M is $300,000 a year, which is more than the hire that created it.
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WHAT IT MEANS.
The $5 million transition is the point where a subcontractor's financial system has to change, because overhead has grown past the rate in the bids, several job start cash holes now open at once, and WIP reporting becomes a requirement rather than an option.
WHAT BREAKS AT $5 MILLION.
Overhead grows with every hire, bids don't follow
At $2M you had one PM and a bookkeeper. At $5M you have two PMs, an estimator, a bookkeeper, and an office manager, and each hire added $60,000 to $90,000 in annual fixed overhead. The overhead rate in bids hasn't been recalculated since the last hire. The distance between the rate in bids and actual overhead is now 6 to 10 points, which costs $300,000 to $500,000 per year in underpriced margin.
Simultaneous cash holes multiply
At $2M you started 3 to 4 jobs a year, each one needing a 75 day cash hole funded, and you funded them one at a time. At $5M you start 8 to 12 jobs a year, some of them at the same time. Three new job starts in the same month stack three 75 day cash holes at once. The total upfront cash required is 3 to 4 times larger than at $2M even though revenue only doubled.
The AR system that worked at $2M can't keep up
At $2M you had 6 to 8 active invoices a month, and calling when you remembered worked well enough. At $5M you've 15 to 25 active invoices across multiple GCs, and the same informal collections habit leaves $150,000 to $300,000 uncollected at any given time. The AR backlog compounds faster than revenue does.
WHAT IT LOOKS LIKE IN DOLLARS.
At $5M with a 7 point overhead shortfall you're leaving $350,000 per year on the table, which is more than the cost of the PM hire that created it. Each point on $5M of revenue is $50,000 in annual underpriced margin.
Twenty minutes. Pull SG&A from the last 12 months, divide by revenue, and compare it to what's in the bids. At $5M with two PMs, an estimator, and a bookkeeper added since the last calculation, the shortfall is almost always 4 to 8 points.
A verified civil client at $7.1M had three new hires that put $180,000 of overhead into the business, and the collections rebuild produced $310,000 in AR collected in the first 30 days. The money was already earned. Nobody was calling on it.
FOUR CHANGES AT $5 MILLION.
Every PM, every estimator, and every additional office staff member changes the overhead rate. The recalculation takes 20 minutes: pull SG&A from the last 12 months, divide by revenue, and compare it to what's in bids. If the difference exceeds 2 points, update the bid model immediately. At $5M with a 7 point shortfall you're leaving $350,000 per year on the table, which is more than the cost of the hire that created it.
A 13 week cash flow forecast that includes all job starts, not just current AR and AP, shows the cumulative cash requirement of simultaneous new job mobilizations. When three jobs start in the same 30 day window, the forecast shows the stacked cash requirement 8 weeks ahead. With 8 weeks you can stagger starts by 2 to 3 weeks: same revenue, much smaller simultaneous cash requirement.
At $5M, collections needs to be a scheduled weekly process rather than a reaction to cash pressure. Every invoice over 30 days gets a call on Monday morning before the week starts, and a collections log tracks every call, every follow up, and every promised payment date. The AR backlog at 45 or more days should never exceed 10% of monthly billings at this revenue level.
At $5M bonding conversations get more complex, because single project limits of $2M to $3M require the surety to see WIP schedule accuracy. SPM builds ControlQore WIP reporting as part of the $5M financial system build. After 12 months of consistent monthly WIP with outcomes that match projections, the bonding capacity conversations improve meaningfully.
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. The one-time onboarding fee is right here in the table.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $2,500 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $4,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $6,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $7,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $9,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $4,500, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
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 and never in a report.
Your bookkeeper still does the books.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
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