Built, Boxed, and Not Billable Until It Leaves the Shop
The casework is finished, wrapped, labeled, and on your floor, and the standard payment clause says none of it counts until it reaches the site.
Most subs produce and bill in the same building, so their payment clause and their work are in the same place. Millwork produces in one building and bills against another, and A201 was written around the second one. That mismatch is why a shop can be stacked wall to wall with finished, profitable product and still be tight on Friday.
The size of it
You finance 100 percent of material and shop labor on every job from buyout through delivery, which on a compressed install schedule runs months. This is the single largest working capital burden in the trade and the reason a busy shop looks profitable in the books and has no cash.
AIA A201 pays for materials and equipment delivered and suitably stored at the site. A millwork shop does roughly 80 percent of its value-add at its own facility, so a job can be fully built and fully paid for in labor and material while it is still outside the payment language. Getting it onto a pay application anyway takes a vesting certificate or bill of sale, physical segregation and project labeling, date-stamped photos, additional insured certificates, supplier lien waivers, and sometimes owner inspection rights. Miss one element and the application gets denied, and you wait another 30 days.
Three moves, in order
Step 01: Job cost structure
Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.
What else costs millwork and casework contractors money
The same mechanism in other trades
What millwork and casework owners ask
Can I bill for finished casework stored in my shop before delivery?
The casework is finished, wrapped, labeled, and on your floor, and the standard payment clause says none of it counts until it reaches the site.
What does it cost?
You finance 100 percent of material and shop labor on every job from buyout through delivery, which on a compressed install schedule runs months. This is the single largest working capital burden in the trade and the reason a busy shop looks profitable in the books and has no cash.
What do I do first?
Read the payment article on the next subcontract before you sign it, and ask for stored materials language that covers off site storage at your shop.
What are millwork and casework contractors supposed to be making?
No survey separates millwork and casework, so there is no figure of its own. The nearest comparable trade in the reference is Interiors, which runs 19% gross margin, 13% overhead and 6% net profit before taxes at $1M–$5M, with a CFOS target of 10% net. Those are derived figures, not millwork and casework's own. Read them as the neighbourhood, and read your own job costing as the answer.
Which part of the system fixes it?
The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 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 millwork and casework 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.