The Top 3 Financial Problems Contractors in Washington Face (and How to Fix Them)
Part 1 of 3
Running a construction business in Washington State right now is no small task. Most contractors are busier than ever — but being busy doesn’t always mean being profitable.
In working with construction companies across Washington, Idaho, and Montana, the same three issues come up over and over again.
If any of these sound familiar, you’re not alone — and they are fixable.
Here is number 1 out of 3 real problems I see. Don't fret, there are solutions.
1. Cash Flow Problems (Even When Work Is Strong)
One of the most common frustrations contractors share is:
“We’re doing a lot of work, but the money in the bank doesn't show it”
Between slow pay cycles, retainage, and change orders, it’s easy for cash to get stuck in the pipeline. Many contractors don’t have a clear system for billing, tracking receivables, or forecasting upcoming cash needs.
The result? Stress around payroll, vendor payments, and growth decisions.
The fix: clear billing processes, AR tracking, and a simple cash flow forecast so you always know what’s coming in and going out.
A clear billing process is non-negotiable. You need to have a schedule of when you complete billing on a consistent basis and should let no more than one week pass after work is completed before sending out an invoice. If this sounds overwhelming to you, or unattainable, it is time for you to get help with the process.
If you are not tracking AR, you are leaving your business open to issues with delayed payment, or even non-payment. I see this happen often with owner-operator small subcontractor and contractor businesses. You do the work, you send the bill, but then you move on to your next project and all the sudden it has been 6 weeks before you realize a client has not paid. This opens your business up to dealing with clients that have life issues happen in that time and now do not have the funds to pay you, you may miss the window to file a mechanic's lien on the property, and you may not realize a customer was unsatisfied with your work and you've missed an opportunity to correct it before they tell potential future clients about their experience. You certainly waste a lot of man hours chasing money for work you've completed when you should be focused on your next project and generating more revenue.
Once you get these two things in order, a cash flow forecast is an easy way to plan for upcoming projects and expenses.
Want to see where you stand? Book a free consultation today and I will walk you through the AR tracking report in Quickbooks Online and some practical tools to help you manage the report going forward. As a contractor or subcontractor in Washington, Idaho and Montana you work hard and the last thing you need is to not get paid for the work you complete.
