GOOD BACKLOG VS DANGEROUS BACKLOG.
A good backlog is signed work that your available working capital can fund through mobilization and the first billing cycle. A dangerous backlog is signed work that exceeds your working capital, so mobilizing creates a cash deficit that compounds every week until the first pay app gets paid. The dollar amount of your backlog tells you almost nothing. The cash requirement of your backlog tells you everything.
Most subcontractors measure backlog in contract dollars. The figure that counts is the cash requirement: how much working capital it takes to mobilize each project and carry it through its first payment cycle. A $3M backlog that needs $400K in mobilization capital, sitting on a company with $180K in available line of credit, isn't a $3M opportunity. It's a $220K cash crisis waiting to happen. Good backlog and dangerous backlog look identical on a revenue forecast, and the difference only appears when you put the cash requirement next to the capital you have.
WHAT IT MEANS.
Dangerous backlog is signed work whose mobilization cash requirement is larger than the working capital you have available to carry it through the first billing cycle.
Good backlog has four characteristics. The margin is at or above your trade benchmark, the GC or owner has a history of paying on contract terms, the mobilization cash requirement fits inside your available line of credit and operating cash, and the payment cycle is short enough that collections rebuild capital before the next mobilization. Miss any one of those and the job can still be worth taking, but it has to be funded on purpose rather than absorbed and hoped through.
THE FOUR THINGS NOBODY PRICES.
The margin is below your trade benchmark
A job priced under your benchmark gross margin consumes capital and returns too little for the risk it carries. It still ties up crew, equipment, and line of credit capacity for the same number of months as a good job. Signed work at a bad price is worse than an open schedule, because the open schedule at least leaves the capital free for the next opportunity.
The GC hasn't paid on terms before
A GC who consistently pays net 60 on net 30 terms doubles your cash requirement on that job without changing a single line of the contract. Payment history is a funding input. If you haven't tracked it by customer, you're pricing every GC as though they all pay the same way, and they don't.
Retainage is capital you won't see until closeout
Ten percent retainage on a $2M project is $200K you won't collect until the job closes out. Across four active projects that's a permanent hole in your working capital that nobody put on a report. It has to be counted in the working capital calculation on every active job rather than treated as a bonus at the end.
Two projects mobilize in the same 30 day window
Two mobilizations inside the same 30 day window doubles the cash requirement in that window. Staggering the start dates by 30 to 45 days can be the whole difference between fundable and not fundable. The schedule decision and the cash decision are the same decision, and usually only one person is making it.
WHAT IT LOOKS LIKE IN DOLLARS.
Plan for 8 to 12 percent of active backlog value in available working capital at any given time. On a $3M active backlog that's $240K to $360K in available cash and line of credit headroom. Where you sit inside that range depends on your payment cycles, how front loaded your SOVs are, and how much of your work is public versus private.
A $1.2M private commercial project with a GC who pays net 30, a mobilization requirement of $90K, and an available line of credit of $300K is good backlog. The cash requirement fits inside the capital with room left over. You can mobilize on Monday without calling the bank first.
A $1.8M public infrastructure project with a 90 day pay cycle, a $220K mobilization requirement, and a GC who runs pay apps through a government approval process is dangerous backlog if you only have $150K in available capital. The work may be profitable and the contract may be solid. The funding still isn't there on the day you have to spend it.
A $7.1M civil contractor signed $5M in work in year two, growing hard and fast. Within 8 months two lines of credit were maxed, an SBA loan was drawn, and a personal line secured against the house was tapped. The work was profitable and the backlog was real, and the mobilization cash requirement of three simultaneous project starts exceeded available capital by $400K.
More than 40 percent of your backlog with a single GC creates dependency risk, so if that GC slows payments your whole cash position is exposed. Projects with complex or undefined scope carry change order risk on top of that. If the GC sits on a change order approval, you fund the work while the billing stalls.
HOW TO WORK OUT THE CASH REQUIREMENT.
Add up labor, material purchases, equipment deployment, and the first two to three weeks of overhead allocation for the project. That total is what leaves the bank before any billing happens. Do it per project rather than as a company average, because the average hides the job that breaks you.
Work out when you can submit the first pay app and what the dollar amount will be. If the SOV has no early recovery line, that date is later than you think. This is the moment the clock on collection starts, not the moment cash reaches the bank.
Take the first billing date and add however long this GC really takes to pay, not the number printed on the contract. That result is the date the money reaches your account. On a public job with an approval process, that date can be 90 days out from the pay app.
Everything you spend between the mobilization date and that collection date is the cash requirement for this project. It's one figure per job, and it's the only backlog number worth reporting to yourself. Total it across every project starting in the same window.
Put the requirement next to your cash plus available line of credit. If the requirement is bigger, the project is dangerous backlog until capital gets raised or the start date moves. That's a decision you can make with data instead of nerve.
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.
