Cash flow challenges contractors more than most businesses. You buy materials before getting paid. You cover payroll for weeks or months before clients settle up. Retainage holds back 5-10% of every invoice for 30, 60, or 90 days after the project ends. In Massachusetts, the winter slowdown can stretch cash thin even when summer was profitable.

Start with deposits. Every project should require money upfront before work begins. For smaller jobs, 50% down is reasonable. For larger projects, negotiate a deposit that covers your material costs at minimum. Clients shouldn’t treat you like a bank.

Use progress billing tied to milestones. Bill when you hit rough-in, when drywall is complete, when you pass inspection. The goal is regular invoices throughout the job instead of one big invoice at the end that takes 45 days to collect.

Invoice the day the work is done, not the following week when you get around to it. Every day you wait is another day before payment arrives.

Track accounts receivable aging weekly. Know who owes you money and how long the balance has been outstanding. Follow up at 15 days, then 30, then more aggressively. The squeaky wheel gets paid first. Contractors who don’t chase receivables end up financing their clients’ projects for free.

Negotiate terms with your suppliers. If you’re paying COD or net 15 while your customers pay you net 30, you’re always behind on cash. Get your materials on net 30 terms so you can bill and collect before the supplier invoice comes due.

Build a cash reserve during your busy months. Set aside 10-15% of profit into a separate savings account you don’t touch. That reserve covers payroll during a slow January or handles the unexpected when a big payment arrives late. Three months of operating expenses is a reasonable target.

Cash flow planning that includes a rolling forecast takes this further. Instead of checking your bank balance and hoping, you see timing gaps coming weeks in advance. You know when to push for collections and when you can safely take on a big materials order.

Know your job costs in real time. A project that looks profitable on paper can destroy your cash flow if costs run over or change orders don’t get billed. Tracking actual costs against budget shows problems while you can still do something about them.

Consider a line of credit before you need one. Banks extend credit when your books are clean and cash flow looks strong. They’re less enthusiastic when you’re desperate. Having a line available doesn’t mean using it, but the safety net helps cover timing gaps.

Most contractors who struggle with cash aren’t bad at their trade. They just don’t have financial systems that match how construction money moves. A bookkeeper for small business who understands construction can help build those systems so cash stress becomes manageable instead of constant.