If you are in construction, you know how tricky managing money can get. You’re juggling several jobs at once, paying crews, ordering materials—each one needing cash at different times.
Meanwhile, you're still waiting on client payments that are taking their sweet time to show up. Then a surprise expense hits or a delivery is delayed, and suddenly your funds go out of whack.
Cash flow is what keeps the whole operation moving. It covers payroll, buys materials, and gives you the cushion to take on the next job. If it dries up, you could get stuck.
The good news? Keeping your cash flow healthy does not need to be overwhelming.
In this post, let's walk through 8 practical ways to improve cash flow and keep your business running strong.
‘Cash flow’ simply means the money moving into and out of your business.
But in construction, timing is everything. It’s not just about booking the job—it’s about when the check hits your account versus when you’ve got to pay your crew, your suppliers, or rent that equipment. That gap can make or break your week.
Here’s why cash flow is so critical in construction:
In short, positive cash flow means you’ve got more money coming in than going out—and that’s the sweet spot you want to stay in.
Start with a simple spreadsheet (Google Sheets works fine). List:
Break it down by week or month. If you use credit to buy materials, place the payment under the month it’s due, not when you make the purchase.
This visibility helps you anticipate shortfalls and plan ahead—whether that’s moving up billing, delaying a big purchase, or chasing a payment.
Bonus tip: Update the forecast regularly as jobs evolve. Don’t “set it and forget it.”
Think of your reserve fund as your financial safety net.
Aim to set aside 3–6 months’ worth of operating costs. That way, if a customer payment is delayed or a project hits a snag, you’re not scrambling to cover payroll or material orders.
Lines of credit can help in emergencies, but interest charges add up fast. A reserve gives you more control and fewer surprises.
The faster you invoice, the faster you get paid. Don’t wait until the job is finished. Instead:
You’ve already done the work—don’t delay getting paid for it. Following up on overdue invoices isn’t pushy, it’s smart business.
Talk to your suppliers. Can you stretch your terms from Net 30 to Net 45 or Net 60? Even a couple of extra weeks can ease cash pressure.
At the same time, shorten payment terms for your clients. If you normally wait 60 days, shift to 30. Incentivize early payments with small discounts (like 2% off if paid in 10 days).
Every day you delay paying and accelerate receiving moves you closer to a positive cash position.
Many contractors don’t realize they’re bleeding cash on jobs until it’s too late.
You need to see what you’ve spent right now, not two months from now.
Use tools like Ontraq.ai that automatically track expenses by job, so you always know:
Real-time job costing = real-time decisions = better cash flow.
Overbilling can create short-term relief—but can leave you in trouble down the line when your costs catch up and the money’s already gone.
Underbilling, on the other hand, puts you in a hole from day one.
Aim to bill accurately based on the work completed and your forecasted costs. Again, milestone billing helps here.
And if you’re not sure where you stand on a project? Time to get clearer job tracking in place.
It’s tempting to scale fast—hire a bookkeeper, get a bigger office, lease a new truck.
But overhead eats cash. Before you add expenses, ask:
For example, instead of hiring a $50K/year junior bookkeeper, many contractors now use Ontraq.ai to handle bookkeeping and job costing for just $299/month.
That’s thousands saved every month—money you can reinvest in growth.
Managing cash flow manually is a time suck—and leaves too much room for error.
Switch to a construction-specific solution like Ontraq.ai, which combines:
You’ll always know what’s coming in, what’s going out, and which jobs are making money.
📌 Want to take the stress out of managing cash flow? Try Ontraq.ai →
Running a construction business is hard enough without juggling spreadsheets, receipts, and overdue invoices.
Ontraq.ai provides construction bookkeeping experts + AI to manage your daily bookkeeping, categorize every expense by job, and give you real-time visibility into your project profits —all for a flat, predictable monthly rate.
✔️ Built for contractors
✔️ Construction experts manage your books
✔️ Get real-time job costing (no more spreadsheet work)
✔️ Gives you your time (and weekends) back
✔️ You don’t need to hire a bookkeeper
If you’re ready to stop flying blind and start building with confidence, Ontraq is your AI-powered bookkeeping team for contractors.
Forecast your inflows and outflows, invoice quickly, track job costs in real time, and keep your overhead lean. Use software like Ontraq.ai to stay organized and up to date.
A cash ratio of 1.0 or higher (meaning current cash and cash equivalents match or exceed short-term liabilities) is considered healthy, but even 0.5 can be okay in construction if cash inflows are steady.
Take the cash received during a period and subtract the cash paid out (for materials, labor, rent, etc.). The result is your net cash flow.
List all expected income (client payments, loans) and expenses (materials, subs, payroll) by month. Subtract expenses from income to see where you may have shortfalls or surpluses. Update it regularly as the project progresses. This will greatly help improve your cash flow.
Cash flow doesn’t have to be your enemy. With the right tools and systems in place, you can stay ahead of problems, grow your business, and sleep better at night.
Want an easier way to manage your cash flow, job costs, and books? 👉 Get started with Ontraq.ai — professional construction bookkeeping service for just $299/month.
.png)
