RECURRING REVENUE VS BACKLOG.
Backlog is signed work not yet performed. It's finite. Crews use it up as they build it, and it's worth the margin still in it. A service business signs agreements, and an agreement has no scope to use up. The contract book either renews or churns. That changes what you measure every month, what a bank underwrites, and what a buyer will pay.
Open a backlog report on a service business and it reads close to zero. The business is fine, and so is the report. Backlog counts contracted scope waiting to be built. A service agreement is a fixed right to order work, so there's no scope to count. If you read that empty report as a warning, you'll go look for volume the business never needed.
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WHAT IT MEANS.
A contract book is the set of recurring service agreements a business holds. It's a list of customers who have committed to ordering work, and the work itself is left off. It's the service equivalent of backlog, and it behaves nothing like backlog.
We publish no service business margin benchmarks, and we won't price your book against one. Labor rates, drive time, how many competitors you have, and what a market will pay for a recurring agreement vary more between two metros than between two trades. So a national average is wrong almost everywhere somebody reads it. The 48 trade benchmark set we do publish is project based construction data, and it doesn't transfer to a service book. We build your targets from your own agreements, your own renewal history, and your own cost per stop. That's less comfortable than an average and more useful.
This confusion is common. Most service businesses are managed by people who came out of project work, or the same company does both. The old habits stay after the old reports stop working. An owner who spent fifteen years reading a schedule of values will keep looking for the document that tells him how much work is committed. In a service business you have to build that document yourself.
WHY THE BACKLOG REPORT READS EMPTY.
The backlog report has nothing to report
A service business signs agreements. An agreement has no scope of work in it, so there's no contracted quantity waiting to be performed. Open a backlog schedule and it reads close to zero, even when the business has more predictable revenue than any project contractor on the street. The report works fine. It answers a question this business doesn't ask.
Churn doesn't announce itself
A project contractor watches backlog fall every month and knows the day he has to sell again. A contract book gives you no signal like that. A customer who is about to stop renewing looks like a paying customer right up until he skips the renewal. If you don't calculate a renewal rate every month, the first sign of trouble is a revenue decline that began three quarters earlier.
A backlog mindset sends the effort to the wrong place
Backlog thinking says the answer to a soft month is more sold work, so you put all your attention on new sales. In a service book the cheapest revenue you have is the agreement already signed. A lost job costs you one job's margin. A lost renewal costs you every future year of that agreement. Owners who act on backlog habits routinely spend more to win a replacement customer than it would have cost to keep the one who left.
The bank and the buyer are reading a different asset
A lender treats backlog as a finite pipeline and discounts it to the margin still in it, because once it's built it's gone. A contract book gets underwritten as revenue that renews. So the bank asks about renewal rate, contract length, and customer concentration. It also asks how much of the book is under a written agreement and how much is a longtime habit. If you present a service business as though it has backlog, you give the bank the weaker of two true stories about the same company.
WHAT IT LOOKS LIKE IN DOLLARS.
Take a book of 120 agreements producing $1,440,000 of contracted revenue in a year. That's $12,000 per agreement, and that's what one renewal is worth. Lose 12 of them and $144,000 of next year's revenue is gone before anybody makes a sale. We built these example figures to show the math. They have no industry authority.
Start with $2,000,000 of recurring revenue and sell nothing new. At an 85 percent renewal rate the book produces $1,700,000, then $1,445,000, then roughly $1,228,000 across three years. At 95 percent it produces $1,900,000, then $1,805,000, then about $1,715,000. Ten points of renewal is close to half a million dollars by year three on the same book. The rates here are examples picked to show the math. Don't price against them as targets.
Assume $1,000,000 of backlog with $150,000 of margin. It contributes $150,000 once and then it's finished. Now assume $1,000,000 of annual recurring revenue renewing at 90 percent. It produces $900,000 next year with no sale made, and it keeps producing after that. The dollar figure is the same and the asset is completely different. We made up the margin and the renewal rate in that comparison to show the math.
WHAT REPLACES BACKLOG.
Every agreement is listed with its start date, its term, its renewal date, its billing frequency, and its annual contracted value. That schedule is the service equivalent of a WIP report, and it's the document the monthly meeting uses. It tells you what's contracted and what comes up for renewal inside the next 90 days. It also tells you how much of your revenue is under agreement and how much is ordered at will.
Renewal rate is the share of agreements up for renewal that renewed. It gets calculated every month, because once a year is too late to do anything about it. Revenue per agreement tells you what one renewal is worth and whether the book is growing by customer count or by price. Together they tell you what backlog told a project contractor, which is how much future revenue is committed and how fast it's disappearing.
A service business bills on a cycle, and a project contractor bills on progress. That makes the 13 week cash forecast easier to build, and you still need it. Recurring invoices go in on their billing dates. Work order revenue goes in based on collection history. The funding decision gets made before the week starts. Books close by the tenth, so the forecast uses finished numbers.
The schedule that organizes your month is the same schedule a lender or a buyer wants to see, with renewal history attached. Written agreements, contract terms, renewal rate over time, and customer concentration are what make recurring revenue an asset somebody will underwrite or pay a multiple for. A verbal arrangement with a loyal customer counts for nothing in that conversation, however reliable it has been for you.
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. We don't bill by the hour, and we don't do payroll. The one-time onboarding fee is 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.
We build your plan every month. Your team does the work.
You get the CFO work: job costing built to match the way you estimate, a 13 week cash forecast, WIP every month, and a monthly meeting that ends with decisions.
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.
We build the plan, track it and adjust it every month.
We only work with trade subcontractors. We know what to look for, and we fix problems while they're still small. 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 pay for it.
Our team does the bookkeeping and the reconciliations. We don't do payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
We manage the money side for you, every week.
Everything in Strategic, plus our team does the controller work. We handle your bills and receivables the way an in-house controller would: we 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.
Our team does the payables and receivables. We don't do payroll, pay applications or collections.
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