Field Guide No. 01

The Cash Flow Guide

Revenue creates opportunities. Cash flow creates stability. The strongest construction companies know the difference — here's how they run it.

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Grow the business. Bank the profit. COASTAL CFO ADVISORS · FRACTIONAL CFOs FOR CONTRACTORS

✺ Start here

Profit ≠ Cash.

One of the biggest misconceptions in construction is that profit and cash flow are the same thing. They're not. A contractor can carry a healthy backlog, strong revenue, and profitable jobs on paper — and still feel the squeeze every single month.

Why? Because you pay for labor, equipment, subcontractors, materials, insurance, and overhead long before you collect the full value of your work. Add retainage, billing cycles, change-order delays and project timing — and managing cash becomes just as important as managing the build.

Revenue & Profit

Look great on the P&L.

Won in the bid, earned in the field. They tell you the job should make money.

Cash

Pays the bills today.

What's actually in the bank to make payroll, buy materials, and fund the next job.

Profitable companies rarely fail from losing money. They fail from running out of cash.

✺ The cash conversion cycle

You pay out for weeks before a dollar comes in.

On a typical job, cash leaves the business long before it returns. Map that gap and you can fund it on purpose — instead of discovering it the hard way, mid-project.

Cumulative cash position Project timeline →
$0 PEAK CASH NEED CASH-POSITIVE RETAINAGE working capital you finance CASH OUT − CASH IN +
Cash out, early — labor, materials, subs, equipment, insurance, overhead.
Cash in, late — progress draws collected, then retainage at closeout.
The valley — the cash you carry until collections catch up.

Illustrative cash curve for a single job. Run several at once and the valleys stack — that combined depth is your true working-capital need, and the number a lender wants to see you managing.

✺ The six levers of cash flow

Six places cash is made or lost.

Run them deliberately and growth funds itself. Ignore them and a profitable backlog can still leave you scrambling for payroll.

01

Working capital

Active jobs tie up cash before they release it. Size that need and keep it funded.

Size the working-capital need for every active job.
Keep a cash buffer sized to the deepest part of the valley.
Match your line of credit to your real cash cycle, not a guess.
02

Collections

Work you've done but haven't collected is a loan you're making to your customer.

Invoice the day a milestone or phase is complete — not month-end.
Chase receivables before they age past 30 days.
Build payment terms and lien rights into every contract.
03

Billing accuracy

Underbilling is unpaid work you've already financed. It quietly starves cash flow.

Bill to percent complete — never fall behind real progress.
Price and process change orders before the work starts.
Review WIP monthly to catch over- and under-billing early.
04

Project forecasting

A tight month should never be a surprise. Look forward, not just back.

Run a rolling 13-week cash forecast — money in and out, updated weekly.
Forecast final job cost from real data, not the original bid.
Track committed costs — signed subcontracts and open POs.
05

Risk management

A single unpaid project or failed GC can take the whole company with it.

Vet customer and GC credit before you mobilize.
Cap your exposure to any single project or general contractor.
Manage retainage and lien deadlines deliberately.
06

Cash conversion

Shorten the distance between spend and collect. Every day you shave off the cycle is cash back in your account.

Negotiate deposits and mobilization payments up front.
Align supplier terms to your billing cycle.
Release your own cash only as fast as you must.

✺ The real shift

Run these six levers and you stop reacting to the bank balance — and start managing cash months ahead, so growth funds itself instead of starving you.

✺ Score yourself

How tight is your cash, really?

Tick every statement that's true in your business today. Be honest — the blank boxes are exactly where cash leaks out, and they're what the six levers fix.

0 / 12 Your cash flow score
Under 8? Cash is leaking somewhere — and it's the most fixable money in the business. The gaps are exactly what we close.

✺ What this takes

Cash flow is a rhythm, not a rescue.

Managing cash isn't a one-time clean-up — it's a cadence. Here's the rhythm the six levers actually run on.

Every week
Update the rolling 13-week cash forecast
Review cash in vs. cash out
Chase receivables before they age
Approve big outflows against the forecast
Every month
Close & reconcile the books
Review WIP & billing vs. percent complete
Reforecast final job costs
Right-size the cash buffer & credit line

The cost of a slow cycle

Shave 30 days off your cash conversion on $10M in revenue and you free up roughly $822K in working capital — cash that was locked inside the cycle, now back in your account.

Faster cash conversion 30 days
On annual revenue of $10M
Working capital freed ≈ $822K

Illustrative: $10M revenue ÷ 365 × 30 days ≈ $822K. Real numbers depend on your billing, collections and retainage — exactly what the six levers fix.

✺ Ready to put this into action?

A financial quarterback, built for the field.

Running cash this way — the six levers, the weekly and monthly rhythm — is the heart of financial visibility. We watch the money side of your business so you're not guessing, see the gaps before they bite, and keep cash ahead of the work. Fractional just means part-time — a few days a month, instead of a full-time salary.

Keeps an eye on your cash — so you plan ahead instead of reacting to the balance.
Bills and collects on time — so finished work becomes deposited cash, faster.
Heads-up before a tight month — weeks ahead, not after it hits.
Funds your growth — without it strangling the bank account.

We work alongside your CPA, banker, bonding agent and bookkeeper — the financial quarterback who keeps everyone aligned around one game plan. Reach out and we'll show you where the gaps are, and what closing them is worth.

Grow the business. Bank the profit.

Reach out and we'll set up a time to see where the cash gaps are — and what closing them is worth.

@jobsitecfo