Mike Andes explains why contractors struggle with cash flow even when jobs are profitable. Payments from clients and municipalities can take 60 to 120 days, forcing contractors to cover payroll, materials, and subcontractors out of pocket in the meantime.
60, 90, or 120 days
About 15%, 20%, or 30% negative on a job before getting paid
Mike Andes
'Contractor Cash Flow: Stop Waiting!' (created 2026-01-27)
Most contractors aren't actually underpaid. They're waiting too long to get paid. And so I think most contractors, let's say they're charging $100 an hour in their market, that might actually be just fine. And they, on paper, should make money. But the problem is they're taking 60, 90, or 120 days to get paid. And this is why I'm against commercial. I'm against a lot of work that's done for, like, municipalities or third party. Like, there's an intermediary between the customer and me, because by the time they get paid and then I get paid, it could be three, four, five months. And even though I might be profitable after doing the job and looking at the math of the job, and this is why so oftentimes people on accrual accounting, like, oh, I earned $300,000, right? But the problem is it took you so long to collect that money. And in the meantime, you had to pay your other contractors, you had to pay your employees, you had to buy materials, you had to buy supplies. You do all the actual things that cost money. And so you went way negative on cash flow. And yeah, maybe for the year, you're profitable, but individual jobs that you put spent money out on cost of goods sold, you could be 15, 20, 30% negative on a job before getting paid a couple months later.
