Why Electrical Contractors Dig a Cash Hole at Rough-In
Electrical contractors dig a cash hole at rough-in, when labor and material pour into the walls faster than pay applications pay out. Switchgear deposits leave the account a year before the gear ships, and prevailing wage work carries overhead most rates never priced. One $2.3M electrical contractor recovered $365K in stuck AR with CONTROL and paid off its line of credit in 30 days.
The specific ways electrical contractors lose cash, pulled straight from what makes this trade different.
Material Buyout Timing
Wire, gear, and fixtures bought early ride on your credit until billing catches up. Buyout timing belongs inside the cash forecast, not just the project schedule.
Switchgear Deposits
Gear deposits leave your account 40 to 60 weeks before the equipment ships. Deposit-backed billing terms keep that money on the project's books instead of yours.
Rough-In to Trim-Out Cash Hole
Rough-in burns labor and material at maximum speed while the schedule of values pays it back slowly. The months between rough-in and trim-out are where electrical contractors drown.
Prevailing Wage Overhead
Certified payroll, fringe tracking, and compliance staff are real overhead that prevailing wage work creates. Rates bid without that overhead lose money legally.
The CONTROL chapters that solve this for electrical contractors specifically.
Why do electrical contractors run out of cash at rough-in?
How do I recover stuck AR as an electrical contractor?
What profit margin should an electrical contractor target?
