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Have a Construction Business? Here's How to Improve Cash Flow

Cash flow is the relationship between money coming into and money going out of a business. Most people are probably familiar with the importance of managing cash flow, especially if they run a business of their own. Construction trades are no different and can be especially susceptible to the inconveniences of poor cash flow management, given they involve the purchase and use of a lot of materials and supplies as well as the timely payment of employees and subcontractors. All of these things cost money. Here are some ways to efficiently oversee and improve the cash flow of your construction business.

Plan for the Long Term

One way to improve your construction business cash flow is to be mindful of jobs your business has lined up for the future. Many invoices will not be paid immediately, but building a steady stream of client contracts for your business will eventually create a regular pattern of incoming payments. The more jobs you have in your pipeline, the more money you can project coming in. When making a major purchase or investment for your business such as new equipment or larger warehouse space, make sure you've looked ahead and lined up enough business to help pay for those upgrades. If your outgoing calendar is looking pretty thin, it might not be the best time for the business to be acquiring assets in exchange for cash.

Price Shop

Your construction business no doubt requires the purchase of materials and building supplies, as well as the occasional service from subcontractors. Price shop for all of these things. Your goal isn't necessarily to find the absolute cheapest material or subcontractor service available. You'll get what you pay for and so will your customers. Instead, try to find the best value for both your business's dollars and for your client's. It will add to your reputation for doing good quality work.

Accept a Variety of Payment Types

Be accommodating when it comes to what payment types you're willing to accept. The fastest way for your business to be paid is for your customers to use the payment method that is the most efficient for them, whether it be cash, check, or electronic payments. You don't have to be set up for every type of payment there is, but having a variety of methods to choose from will help your clients have more options to pay you and result in quicker invoice responses.

Bill Accurately

Over- or underbilling can create skewed numbers in the cash flow of your construction business, creating an unrealistic representation of whether your business is in a state of profit or deficit. The best option is to bill based on what has been completed at any given time, as opposed to projecting costs and materials ahead of time or promising a discount.


In order to run any business effectively, cash flow needs to be considered and respected. The same as with personal or household finance strategies, businesses need to be constantly mindful of how much money is coming and going. Most businesses would like to be doing slightly better than just breaking even but operating at a deficit is simply not sustainable. Being aware of the cash flow in your construction business will allow you to make good money managing decisions and ultimately run your business more effectively.

Utilizing Nationwide Notice, Inc. gives you more control over the lien filing process to protect your right to receive payment. A construction lien is a tool that helps to protect professionals in the construction industry from the risk of non-payment for work performed. Rules for filing a lien differ depending on the state where you operate. As a full and self-service notice and lien company, our priority is to assist our clients to secure their payments. Check out our full list of services on this page - or for more information about how lien filing software can benefit you, contact Nationwide Notice, Inc. to discuss what we can do to help you protect your receivables

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