The Pump Can't Be Ordered Until The AHJ Signs The Calc
You cut the pump deposit check in March and the truck backs in the next January, and every month in between your money is out with nothing on the pay app.
Plenty of trades buy long lead gear. Fire protection is the only one whose single biggest equipment buy falls legally downstream of a third party's plan review, because a fire pump is a listed package sized off an approved calc: pump, controller, jockey pump, sensing line, and sometimes a diesel driver and day tank. A framer can buy studs the week he needs them. You're writing a six figure deposit against a drawing a fire marshal hasn't commented on yet.
The size of it
A 20 to 30% deposit on a $120k to $250k package leaves your account 8 to 12 months before that pump can be billed as installed. Stored material billing needs an invoice, a bill of sale, and an insurance cert, and plenty of GCs cap or refuse off-site stored material outright, so the money stays out with no pay app to put it on.
The pump can't be ordered until the hydraulic calculation is approved, and the calculation can't be finished until the water purveyor runs the hydrant flow test. That stacks the longest lead item on the job behind the slowest approval on the job, in series. Once the order goes in there is a deposit, then a progress payment at release, and the controller is usually the item pacing the whole package. The pump room pad, the electrical feed, the transfer switch, and the fire alarm interface all key off a ship date the manufacturer owns and you can't push. Job cost has to show that cash as committed the day the PO is cut, not the day the truck backs in.
Three moves, in order
Step 07: Monthly cadence
Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month.
What else costs fire protection contractors money
The same mechanism in other trades
What fire protection owners ask
How to bill for a fire pump deposit before it ships?
You cut the pump deposit check in March and the truck backs in the next January, and every month in between your money is out with nothing on the pay app.
What does it cost?
A 20 to 30% deposit on a $120k to $250k package leaves your account 8 to 12 months before that pump can be billed as installed. Stored material billing needs an invoice, a bill of sale, and an insurance cert, and plenty of GCs cap or refuse off-site stored material outright, so the money stays out with no pay app to put it on.
What do I do first?
Give the pump package its own cost code and log two dates against it, calc approval and PO release, so the monthly job review reports that delay in weeks.
What are fire protection contractors supposed to be making?
Fire protection runs 23% gross margin, 15% overhead and 8% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.
Which part of the system fixes it?
The step is number 07, monthly cadence. Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month. It comes from chapter 7 of CONTROL: The Construction Financial Operating System.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for fire protection contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.