The Profitable Contractor Who Can’t Make Payroll
A contractor has $80,000 in outstanding invoices. He’s booked solid for the next six weeks. But he’s sweating over a $4,200 materials bill due Friday, and his checking account has $1,800 in it.
He’s not failing. He has a cash flow problem — one of the most common and least talked-about challenges in the trades.
The Three Levers That Fix Cash Flow
1. Invoice Faster
The single highest-impact change most contractors can make is to invoice the same day the job is complete. Every day you delay an invoice is a day you delay payment.
2. Tighten Your Payment Terms
The industry default of “Net 30” is a convention, not a law. Many successful contractors use Net 7 or Net 14 for residential work, and require a deposit upfront for larger jobs.
Pro Tip: Offer a 2% early payment discount for invoices paid within 48 hours. For a $2,000 invoice, that’s $40 — a small price to pay for immediate cash in hand.
3. Require Deposits on Large Jobs
For any job over $1,000, require a 30-50% deposit before you start work. This covers your materials cost upfront and filters out clients who aren’t serious.
Start Today
With MyToolbelt, you can speak your invoice out loud while you’re still at the job site. The client gets it in their inbox before you’ve driven away. The faster they receive it, the faster they pay it.