Free guides made for real businesses like yours.
In the residential and construction industry, managing cash flow isn't just about tracking income and expenses—it's about survival. Delays in payments, unexpected costs, and slow project cycles can choke progress. Here's how to stay ahead, protect your margins, and keep every build financially sound.
Forecasting isn’t guesswork. Build out a 3 to 6-month cash flow plan for each project that includes materials, subcontractors, site delays, and client payments. Don't forget to factor in retention percentages, which can tie up cash well after project completion.
The quicker you send an invoice, the sooner you get paid. Set clear terms (ideally 14–21 days), automate reminders, and follow up respectfully but consistently. Make sure every invoice includes line-item clarity to avoid delays or disputes.
Suppliers often offer better terms to contractors who ask. Stretch payment timelines for purchases while shortening receivable terms with clients. Even a 10-day difference can ease cash flow pressure during tight months.
It’s tempting to buy everything upfront, but stagger material purchases to match the project timeline. Avoid tying up cash in idle stock or excessive manpower when the project doesn’t demand it yet.
Always budget a contingency buffer—5% to 10% of project value—for unplanned issues like equipment failure or site damage. This prevents you from borrowing or dipping into personal reserves when the unexpected hits.
The difference between a smooth build and a stalled project often comes down to cash flow. With smart planning and clear processes, your construction business can grow confidently—even when the market feels uncertain.
💡 Struggling to keep your construction projects cash positive? Our Advisory Services help builders and contractors manage project cash flow, forecast spend, and avoid funding gaps that delay work.
Construction projects often involve upfront costs, long payment cycles, and retention percentages that delay access to funds. Add in supplier timelines, weather delays, and labour costs — and cash flow gaps become a real risk even for profitable contractors.
Build a detailed projection by listing out every expected cost (labour, materials, subcontractors) and match it to the timing of client payments. Don’t forget to include VAT, retention holds, and contingency for delays or change orders.
Invoice immediately after milestones, negotiate better supplier terms, stagger materials delivery, and automate payment reminders. Even negotiating 10–15 extra days to pay can improve your liquidity when cash is tight.
Absolutely. Setting aside 5–10% of each job as contingency can prevent you from halting work when things go wrong. Emergencies like broken equipment or late client payments can derail even well-planned projects without a buffer.
Book a free consultation with our accounting team today. We’ll walk you through building a stronger cash flow strategy tailored to your next project.