YOUR MATERIAL DEPOSITS ARE DRAINING YOUR CASH BEFORE THE JOB STARTS.
You sign the contract, release the switchgear, and pay a 40% deposit of $180K. The material comes in 16 weeks later, and your first pay app collects six weeks after that. That's $180K out of your account with the job not yet started. Long-lead deposits are one of the most overlooked cash flow problems in commercial subcontracting, and they're entirely manageable when you plan for them.
A deposit is the only major job cost with no billing attached to it. Labor gets billed the month you spend it and material gets billed once it's installed or stored, but a fabrication deposit sits on the balance sheet as a prepayment while the cash is already gone from the bank. The fix isn't a bigger line of credit. It's knowing in Week 1 which week the deposit is due, whether the contract lets you bill for stored material, and how many other jobs want a deposit inside the same 60 day window.
WHAT IT MEANS.
A material procurement deposit is the down payment a supplier or fabricator requires before it will start building your long-lead material, commonly 30 to 50 percent of the order and due months before anything reaches the site.
Switchgear, transformers, custom structural steel, precast concrete, large diameter pipe, and specialty mechanical equipment are the usual culprits. They're also the items a general contractor pushes you hardest to release early, because the schedule depends on them. Releasing early is the right call for the schedule and the wrong call for your bank balance unless somebody has worked out what the release costs you and when.
WHERE THE MONEY GOES EARLY.
Long-lead material takes cash early
Switchgear, transformers, custom structural steel, precast concrete, large diameter pipe, and specialty mechanical equipment often require 30 to 50 percent deposits three to six months before delivery. That cash is out the door with no billing behind it until the material reaches the site. Nothing has gone wrong on the job and the account is already down six figures.
Deposits don't appear on the pay app
Most subcontractors don't bill for material until it's installed, so a deposit paid in Month 1 doesn't earn revenue until Month 4 or Month 5. On a $2M job with $400K of early deposits, you carry that deficit for months out of the operating account or the line of credit. The job is fine. The funding of the job is the problem.
Several jobs with overlapping deposits
When two or three jobs need long-lead deposits inside the same 60 day window, the drain compounds fast. A $100K deposit on Job A, a $150K deposit on Job B, and a $75K deposit on Job C all due the same month is a $325K cash deficit nobody planned for. Any one of the three is survivable alone. Together they empty the operating account.
WHAT IT LOOKS LIKE IN DOLLARS.
A $1.5M job that requires $300K of deposits has that cash out of the account for months before a dollar of it can be billed. The job isn't late and the crew hasn't done anything wrong. The billing has simply not caught up to the spending yet.
$100K due on one job, $150K on another, and $75K on a third inside the same month is $325K of cash out with no billing behind any of it. That's the month a profitable contractor calls the bank, and it was visible in the procurement schedule six months earlier.
HOW IT GETS COVERED.
AIA contracts allow billing for material stored on site or in bonded storage. Submit a stored material request with the pay app the month the material comes in, documented with lien waivers and material certifications where the contract calls for them. This one move can recover 30 to 60 days of the deposit shortfall, and it costs you nothing but the paperwork.
Every deposit requirement gets mapped to the week it's due at job start, not after the first invoice comes in. Months where deposits overlap across jobs get flagged six to eight weeks ahead of time, and line of credit draws get lined up before the deposit month rather than during it.
Push for milestone deposits tied to fabrication stages instead of one payment up front. Ask for extended terms on the smaller material orders. On the truly large items, ask the GC for an advance payment or for owner-furnished material. Read your contract first, because some already allow material cost reimbursement ahead of installation.
Every deposit and long-lead requirement goes into the 13 week cash flow forecast at job start for every client. When a $200K switchgear deposit is due in Week 8, it's in the forecast in Week 1. Six weeks of warning gives you choices about draws, billing, and payables. The same deposit as a surprise gives you one phone call to the bank.
THE OUTPUTS, NAMED.
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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