PIPE PROCUREMENT IS A UTILITY CASH PROBLEM.
Underground utility contractors order pipe 8 to 12 weeks before the trench opens. The pipe reaches the yard before the site is ready, installation happens weeks later, billing triggers after installation, and collection comes 45 to 60 days after that. From deposit to cash can take 120 to 150 days. On a $300K pipe package that's $300K out the door for five months before it comes back, and on two jobs at once you're holding $600K of permanent float.
The procurement to payment timeline on a utility job is longer than almost any other trade. That's a structural feature of underground work rather than anybody's fault: the material has to be on site before the trench opens and it gets paid for long after it's installed. That also means the float requirement is predictable, and a predictable requirement is a fundable one. A utility contractor who has calculated the figure can size a line of credit against it and stop treating every large pipe order as an emergency.
WHAT IT MEANS.
Pipe procurement float is the money an underground utility contractor has tied up between paying for pipe and fittings and collecting the billing for them, and it routinely takes 120 to 150 days.
WHERE THE CASH GETS TIED UP.
Long lead pipe orders
Large diameter pipe, ductile iron, and specialty fittings can have 8 to 16 week lead times. The order goes in before site prep is complete and sometimes before the contract is fully executed, and the deposit goes out immediately. By the time the trench opens, that cash has been out for two to three months with no billing event in sight.
Delivery before the installation window
Pipe gets delivered when the supplier can deliver, not when the crew is ready to install it. Lining delivery up with the trench schedule is hard, so material often stays in the yard or on the laydown area for 2 to 4 weeks before installation starts. That's 2 to 4 more weeks of holding the full material cost with no billing event triggered.
Installation based billing structure
Most utility SOVs are built around installation milestones: pipe placed, tie ins complete, and testing complete. The billing event triggers after installation, which leaves the whole procurement and staging period uncompensated from a billing standpoint. Without stored materials billing, the only way to recover procurement cost is to get the work installed first.
Fittings and appurtenances add up
Main pipe is visible and easy to track. Fittings, couplings, valves, service saddles, and appurtenances usually disappear into a miscellaneous material line. On a $1M utility job, fittings and appurtenances can be $80K to $120K, ordered early, delivered piecemeal, and billed at installation completion, so tracking them separately is the difference between billing $400K and billing $520K in month two.
WHAT IT LOOKS LIKE IN DOLLARS.
On a $300K pipe package, the 120 to 150 day distance between deposit and collection means $300K is out for roughly five months. Have two jobs like that at once and $600K is permanently tied up in float. That is a capital requirement, and it has to be funded before the job starts.
Model the full procurement float: deposits to pipe suppliers plus fittings and delivery costs, less any upfront mobilization billing recovery. On a $4M utility contractor doing two simultaneous jobs with $300K in pipe orders each, the minimum line of credit capacity for procurement alone is $600K. Most utility contractors are badly underbanked against their real float requirement.
THREE THINGS WE CHANGE.
Every utility contract with real pipe value should include a stored materials line item negotiated before contract execution. The line covers pipe, fittings, and appurtenances at delivery rather than at installation. That one SOV negotiation compresses the wait from delivery to billing from 60 to 90 days down to 5 to 10 days on major deliveries.
Don't let fittings disappear into a miscellaneous line. Build a stored materials schedule that itemizes pipe by size and quantity, fittings by type, and appurtenances by item. Photograph everything at delivery, then tag and stage it in a designated laydown area, so each delivery becomes a billable event instead of a miscellaneous charge absorbed into an installation milestone 6 weeks later.
Every pipe order has a deposit date and a delivery date, and every delivery triggers a possible billing event. Map those dates against the billing collection schedule in the 13 week forecast. Anywhere procurement payment beats billing collection by more than 30 days is a line of credit draw candidate, and the draw gets made ahead of the shortfall rather than after the bank account gets low.
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.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
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. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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.
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.
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.
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