Fractional CFO for Construction Companies
Construction is one of the few industries where a profitable job and a solvent business are genuinely different questions. We work on both.
The Financial Challenges Construction & General Contractors Face
Work-in-progress that nobody trusts
The WIP schedule is the single most important report in a construction business and the one most often wrong. Over- and under-billings get estimated rather than calculated, and by the time the year-end adjustment lands the picture has moved so far that nobody believes the monthly numbers any more.
Retainage tying up your margin
Five to ten percent of every job sits with the owner, sometimes for a year past completion. On a growing book that is a permanent, growing hole in working capital, and most contractors have never quantified what it actually costs them.
Job costing that arrives too late to act on
Knowing a job lost money after it closed is history, not management. The costing has to land while there is still schedule left to change the outcome.
Bonding capacity capping your growth
Your surety looks at working capital and equity before it looks at your backlog. Contractors regularly discover they cannot bid the work they have earned the right to bid, because the balance sheet was never managed with the bonding programme in mind.
How We Help
Monthly WIP with real over/under billings
Calculated from actual cost-to-complete, not estimated. Reviewed monthly so the adjustment never becomes a year-end surprise.
Job-level margin while the job is live
Costing by phase and cost code, reported while there is still time to change something.
Cash forecasting built around retainage and draws
A 13-week view that models draw schedules, retainage release and payment behaviour by owner — not an average.
Bonding and banking strategy
Balance sheet managed deliberately toward the working capital and equity your surety wants to see, so capacity grows with the backlog.
Change order discipline
Tracking what was approved, what was performed and what was billed, because unbilled change orders are where construction margin quietly disappears.
Percentage-of-completion done properly
Revenue recognition your CPA, your bank and your surety all read the same way.
What we watch in a construction business
Backlog quality, not just size
A large backlog of low-margin work is a liability, not an asset. We report backlog weighted by expected margin so growth decisions are made on profit rather than volume.
Cost-to-complete accuracy
The single input that determines whether your WIP is truthful. We track estimate-versus-actual by project manager, because systematic optimism in one estimator distorts the whole schedule.
Days of working capital
How long the business can fund itself between draws. This is the number that decides whether you can take the next job, and most contractors have never calculated it.
Labour productivity by crew
Hours earned against hours burned. It is the earliest reliable warning that a job is going wrong, usually weeks before the cost report shows it.
Services
Fractional CFO
Senior finance leadership part-time, with controller support underneath it.
Fractional CMO
Marketing strategy and demand generation held to the same standard as the numbers.
Exit Planning
Clean books, a defensible story and control of the narrative before diligence starts.
72-Hour Cash Flow
A fast, honest read on your cash position when the answer cannot wait.
What does a fractional CMO do for a construction business?
Most contractors have never had a marketing strategy, and for years did not need one — the work came from relationships, repeat clients and general contractors who knew the crew. That works until a key relationship retires, a GC consolidates its vendor list, or the market slows and everyone bids the same job.
The recurring problem is that lead flow is invisible. Nobody can say which jobs came from where, what a lead costs, or which service line is worth chasing. Meanwhile the trucks are wrapped, someone is boosting posts, and there may be a yard sign budget nobody has measured since 2019.
A fractional CMO gets that measurable first: which channels actually produce jobs, what the cost per booked job is by service line, and where the estimating pipeline leaks between call and contract. Then it decides what to stop.
It matters more if a sale is anywhere in view. A contractor whose backlog depends on the owner's personal relationships is worth measurably less than one with a repeatable pipeline, because the first is harder for a buyer to keep.
It works as a standalone engagement or in tandem with the finance side. Scope and current pricing are laid out on the fractional CMO page.
Work-in-progress is where construction finance breaks
Almost every construction company we meet has the same underlying problem, and it presents in the same way: the P&L reports a margin the jobs never earned. Not through anyone's dishonesty — through work-in-progress that nobody has reconciled.
The mechanics are simple and the consequences are not. Costs land when they are incurred; revenue is recognised on a schedule that may or may not track them. Without a WIP schedule reconciling percentage complete against costs to date and estimated cost to complete, you get overbillings that look like profit and underbillings that look like nothing at all. A company can bill ahead across several jobs, report an excellent quarter, and be quietly borrowing from work it has not yet done.
Change orders make it worse. Work performed before the change order is approved is cost without revenue, and in most companies the schedule is not updated until someone gets around to it. The gap between what the field knows and what the books know is where construction margin disappears.
Fixing it is unglamorous and fast: a WIP schedule reconciled monthly, costs coded to jobs consistently, and estimated cost to complete owned by someone who actually knows the job. It changes bidding decisions within a quarter, because for the first time the historical margin by job type is real.
What changes as a contractor grows
The finance problem is not the same at $3M as at $50M, and the usual mistake is bringing the $3M answer to the $50M problem.
$2M–$10M
The bookkeeper has been outgrown. Job costing is informal or absent, so nobody can say which work is genuinely profitable. First priorities: a close that closes on time, costs coded to jobs, and a 13-week cash view. Everything else waits.
$10M–$30M
Bonding capacity becomes the constraint on growth, and bonding companies read financial statements closely. WIP has to be reconciled and defensible, equipment financing decisions start carrying real weight, and overhead allocation across jobs stops being a rounding error.
$30M–$50M+
Multi-entity structures, joint ventures and private equity interest. Consolidated reporting, a defensible quality-of-earnings position and customer concentration understood before a buyer finds it — see exit planning.
Specialty trades
The core problems are shared, but each trade has cash timing of its own. These pages go into that detail.
Roofing
Insurance claims cycles, storm surges and the funding ceiling that decides how much work you can actually take.
HVAC
Severe seasonality, maintenance agreements as recurring revenue, and margin by service line.
Plumbing
Service, new construction and commercial behave as three businesses with three different cash profiles.
Electrical
Bid-to-win economics, material cost volatility, and the specialty work where positioning is still available.
Frequently Asked Questions
What does a fractional CFO do for a construction company?
Owns the reporting that construction actually runs on: the WIP schedule with calculated over- and under-billings, job-level margin while jobs are live, a cash forecast that models draws and retainage rather than averaging them, and a balance sheet managed toward your bonding programme. Alongside that, the standard CFO work — forecasting, pricing, capital strategy and exit readiness.
How is construction accounting different from regular accounting?
Percentage-of-completion revenue recognition, WIP schedules, retainage, change orders and job costing all have no equivalent in most industries. A general bookkeeper can keep the ledger tidy and still produce a P&L that tells you nothing true about whether the business is making money. That gap is where most contractors get hurt.
Can you help increase our bonding capacity?
We can help you manage toward it. Sureties underwrite working capital, equity and the quality of your reporting. Those are all things a CFO influences deliberately over a few quarters — cleaner WIP, better cash conversion, retained earnings strategy. We cannot make an underwriting decision for you, but we can make you a better risk.
We already have a bookkeeper and a CPA. Why add a CFO?
A bookkeeper records what happened. A CPA files it and keeps you compliant. Neither is engaged to tell you which jobs to stop bidding, whether your rates cover your real overhead, or whether you can afford the next crew. That forward-looking work is the CFO seat.
Do you work with subcontractors as well as general contractors?
Yes. The mechanics differ — subs live with pay-when-paid terms and much less control over schedule — but the underlying issues are the same: job costing, retainage, cash timing and knowing which work is genuinely worth taking.
Ready to talk about your construction business?
A conversation, not a pitch. If we are not the right fit we will tell you.
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