01
Start with reality
Use bank balances, receivables, payables and committed job costs.
Contractor Cash Forecasting
See the Cash Crunch Before It Arrives
Construction cash flow is a timing problem before it is a profit problem. Payroll, materials, and subcontractors can be due weeks before a GC pays, in addition to retainage being held for a longer period of time. I build practical cash forecasts around the commitments contractors actually have to fund.
A profitable backlog does not guarantee enough cash for the next payroll. The forecast has to reflect collection timing, committed costs and taxes, not just monthly profit.
Thirteen weeks, updated weekly. Payroll, material buys, sub payments, taxes, and debt service must be accurate amounts. For the money coming in, what your customers actually pay matters. It is not just what the terms say. Then, retainage sits in its own line because it is not next week's cash. Although the point of the forecast is not to be exact to the penny, you must be close enough that it shows you the gap far enough in advance that you still have options.
I build thirteen week forecasts every week for contractors, and it is the first thing I look at before I answer any question about what the next quarter can carry.
When to Get Help
Warning Signs I Look For
- Payroll is planned from the current bank balance
- Tax money is used to cover operating shortages
- Retainage and 60-to-90-day receivables are treated like available cash
- The owner cannot tell whether the business can safely take the next job
The Work Product
What You Receive
- A rolling 13-week cash forecast
- Expected collections by customer and project
- Payroll, material, subcontractor, tax and debt commitments
- Retainage and slow-pay assumptions shown separately
- Base, pressure and recovery scenarios
- A weekly update and decision routine
A Controlled Process
How the Work Moves Forward
02
Time the cash
Place receipts and payments in the weeks they are realistically expected.
03
Stress test
Model delayed collections, payroll weeks and material-heavy phases.
04
Decide early
Use the forecast to sequence payments, accelerate billing and protect tax obligations.
Questions Contractors Ask
Why use a 13-week cash forecast?
Thirteen weeks is long enough to expose payroll, tax, material and collection conflicts while remaining detailed enough to update from current information.
Can the forecast include individual jobs?
Yes. For contractors, useful forecasting often starts with expected billings, collections and committed costs by project before rolling them into the company view.
Is cash forecasting useful if customers pay unpredictably?
Yes. Uncertainty should be modeled explicitly with realistic dates and scenarios instead of being hidden in a single optimistic number.