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 carry 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.
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 sit next to 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 buried inside AR. When it's buried, nobody is chasing it and nobody can say how much of it's sitting 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 runs slightly overbilled, and heavy underbillings on the balance sheet are a warning that cash is leaking 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 arithmetic 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, and no add-ons.
| 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.
FREQUENTLY ASKED.
