THE SUBCONTRACTOR BALANCE SHEET EXPLAINED.
A subcontractor balance sheet shows what the business owns, owes, and is worth at a single point in time. The lines that count most for a sub are working capital, retention receivable, and under or overbillings, because bonding companies and lenders read those three first to decide how much risk they will extend to you.
Most owners can read a profit and loss statement and have never opened the balance sheet. That's backwards. The P&L tells you whether last month made money, and it has no say in how big your next job can be. The balance sheet is the document a surety and a bank use to set your bonding line and your borrowing room. Three lines account for almost all of the weight: working capital, retention receivable, and the billing position that reveals whether you're financing your customer or your customer is financing you.
Rather talk it through first? Book a 20 minute call. Nothing gets sold on this call.
Want it set up for you? Onboarding only, from $4,500 one time. Books migrated and job costing built, then your own team keeps it up.
WHAT IT MEANS.
A balance sheet is a statement of a company's assets, liabilities, and equity at a single point in time.
The P&L covers a span of time and the balance sheet covers a single day, which is why the two reports disagree so often. A good month of earnings can exist alongside a thin balance sheet when those earnings are still tied up in retention and uncollected receivables. Growth pushes the two further apart, because more work in progress means more of the business's value parked in lines that haven't turned into cash yet.
WHAT BONDING AND LENDERS READ FIRST.
Working capital, current assets minus current liabilities
Working capital is the line that largely sets your bonding capacity, and sureties commonly estimate a bonding line at ten to twenty times the working capital number. It's the first figure an underwriter looks at, ahead of the P&L and ahead of the job list. A subcontractor with thin working capital gets a small bonding line no matter how good last year's net profit looked.
Retention receivable, the cash held back until closeout
Retention is cash you already earned that the GC is holding until the job closes, and it belongs on its own receivable line instead of folded into AR. When it's folded in, nobody is collecting it and nobody can say how much of it's out there. Tracked as its own line, it becomes a collectible balance with a release date rather than money you forgot you were owed.
Under and overbillings, who is financing who
Underbillings mean you performed work you haven't billed yet, so you're financing the customer out of your own cash. Overbillings mean you billed ahead of the cost you incurred, so the customer is financing you. A healthy subcontractor is slightly overbilled, and heavy underbillings on the balance sheet are a warning that cash is being lost through billing lag or profit fade.
WHAT IT LOOKS LIKE IN DOLLARS.
For a mature $12M sub, the destination looks like $650,000 in the bank, $1.2M in working capital, and zero debt. A current ratio above 1.3 is the CONTROL Book standard, which means current assets comfortably cover current liabilities. The published outside floor is lower, at the 1.15 to 1.20 minimum standard in CFMA's 2023 surety prequalification guidance, against a construction industry mean of 1.7. Below 1.0 means short term obligations exceed short term assets, and that's a serious liquidity warning regardless of how profitable the jobs look.
HOW THE BALANCE SHEET OPENS THE DOORS.
Retention comes out of AR and onto its own line with a release date attached to each job. Once it has a line, somebody can be accountable for collecting it, which is the whole point of separating it. Retention that nobody tracks is the most reliably forgotten money on a subcontractor's balance sheet.
The billing position gets reviewed against cost incurred every month so heavy underbillings don't build up unnoticed. A slightly overbilled position is the target, because that means the customer is funding the work rather than you. Correcting the position is a billing discipline problem long before it's a financing problem.
Working capital grows by keeping profit in the business and by collecting faster, and those are the only two sources. Because sureties commonly size a bonding line at ten to twenty times working capital, every dollar retained buys ten to twenty dollars of capacity to bid larger work. That's the math that turns a balance sheet into bigger jobs.
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.
FREQUENTLY ASKED.
