THE PROBLEM · FIXED BY STEP 07

The month payroll nearly didn't clear

You moved money on a Thursday night and kept it to yourself. It's happened more than once.

DIRECT ANSWER

A payroll near miss starts weeks earlier, usually in receivables or billing. Sometimes the cause goes further back, into how the job was bid. By the time the bank balance shows it, that cause is weeks old, and treating the week itself as the problem leaves the cause in place.

WHAT TO DO

Three moves, in order

STEP 01

Trace the near miss back to its cause, starting with billing dates and collection speed, then checking whether the job itself lost money.

STEP 02

Build the 13 week forecast so the next one is visible three weeks out.

STEP 03

Set a minimum cash floor and treat it as a hard constraint on bidding.

THE STEP

Step 07: Monthly cadence

Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month.

CFOS-07 · CHAPTER 7

The monthly close that takes a contractor 5 hours

Read the step that fixes this, what it depends on, and what it changes downstream.

DIAGNOSTIC

Find your numbers

Pick your trade and revenue band. Get your targets, your shortfall, and the step order that closes it.

SYSTEM HUB

All 8 steps in sequence

What each step depends on, what it feeds, and why the order counts for more than the speed.

SAME STEP

Other things that go wrong

CFOS-03

You're bidding below your own overhead

If the overhead percentage in your estimating template is lower than what you actually run, every job you win loses money before a single hour is worked.

CFOS-03

Your overhead rate has not been updated in years

The rate in your bid sheet was right once. Revenue doubled, you hired two PMs and a fleet, and the rate never got revisited.

CFOS-02

Your equipment is eating the margin

The machine is paid for, so the jobs use it at no charge. Then the transmission goes and the year is gone.

PROOF

Contractors who had this

CIVIL

Two maxed credit lines and an SBA loan, cleared in 90 days

A turnkey civil contractor grew from $500,000 to $5M in two years and financed every month of it, until the house was collateral.

ELECTRICAL

$365,000 of receivables recovered, all debt cleared in 120 days

A commercial electrical subcontractor had a collections problem long enough that it turned into a debt problem.

QUESTIONS

What owners ask

Construction payroll cash flow problem?

You moved money on a Thursday night and kept it to yourself. It's happened more than once. A payroll near miss starts weeks earlier, usually in receivables or billing. Sometimes the cause goes further back, into how the job was bid. By the time the bank balance shows it, that cause is weeks old, and treating the week itself as the problem leaves the cause in place.

Which part of the system fixes this?

The step is number 07, monthly cadence. Weekly bookkeeping, cost to complete, and one CEO report, on the same days every month. It's drawn from chapter 7 of CONTROL: The Construction Financial Operating System.

Is this normal for my trade?

Across the 48 trades that publish a figure, net profit at $1M–$5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.

Where do I start?

Trace the near miss back to its cause, starting with billing dates and collection speed, then checking whether the job itself lost money.

Can I fix this without touching anything else?

You can try, and it doesn't hold. Step 07 depends on step 03, overhead calculation and step 04, estimating system and step 05, software and bookkeeping alignment and step 06, project management. Install it ahead of those and it produces numbers the field won't trust, which is worse than the problem you started with.

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Wrote CONTROL, the 8 step system behind these figures. More about the author.