It's Thursday afternoon. Payroll processes tomorrow. You've got $87,000 in the bank. Payroll is $92,000.

You pull up your accounts receivable report. Three invoices are outstanding—totaling $215,000. One is 8 days overdue. Another hits 30 days next Tuesday. The third isn't due for 12 more days.

You call the GC on the overdue invoice. "Should hit your account early next week," they say. You've heard this before. You start calculating: Can you delay that material supplier payment? Can you push back the equipment rental invoice? Can you ask your foreman to hold off depositing his reimbursement check?

This is insane. You're running a profitable construction company. Your income statement shows strong margins. You've got $680,000 in backlog. But you're scrambling to make payroll because you have no idea what your cash position will be next week, next month, or next quarter.

Sound familiar?

Most Des Moines contractors manage cash flow by checking their bank balance and hoping for the best. They know what's in the account today. They have a vague sense of bills coming due. They assume payments will arrive "sometime soon." Then they're blindsided when three payments get delayed simultaneously and they can't make payroll.

The uncomfortable truth: Your generic CPA isn't helping. They give you an income statement showing you're profitable. They tell you your accounts receivable are "$215,000 outstanding." But they don't tell you when that money hits your account, when your bills are actually due, or what your bank balance will be in Week 6 when you need to make that $85,000 equipment purchase.

Profitability and cash flow are not the same thing. You can be profitable and broke. You can have great margins and miss payroll. This happens to contractors across Des Moines, Ankeny, West Des Moines, Johnston, Grimes, Clive, and Waukee every single month—not because their businesses are failing, but because nobody's forecasting cash flow.

This isn't another generic "manage your cash flow" article. This is a comprehensive framework for building a 13-week rolling cash flow forecast that tells you exactly what your bank balance will be every single week for the next three months—so you never get blindsided by cash shortfalls and you can make strategic decisions instead of reactive scrambles.

Let's fix your cash flow forecasting.

Why Most Des Moines Contractors' Cash Flow "Management" Is Actually Just Crisis Response

The Bank Balance Fallacy: Why Your Current Balance Tells You Nothing

Here's how most construction contractors manage cash flow:

Monday morning: Check bank balance. Shows $127,000. Feels good. Must be doing okay.

Tuesday: $48,000 in vendor payments clear. Balance drops to $79,000. Still feels acceptable.

Wednesday: Customer payment of $65,000 hits the account. Balance jumps to $144,000. Excellent! Business is great.

Thursday: Realize payroll is $92,000 tomorrow, equipment rental payment of $18,000 is due, and you've got $35,000 in material invoices that are overdue. Your "comfortable" $144,000 is actually about to become $1,000 if everything hits at once.

Friday panic: Frantically calling customers asking them to expedite payments, negotiating with suppliers for payment extensions, considering whether to delay payroll (never do this), and wondering how a "profitable business" is constantly broke.

This is not cash flow management. This is cash flow crisis response.

The problem isn't your bank balance today. The problem is you have zero visibility into:

• What payments are hitting your account in the next 30 days
• When your major expenses are actually due (not just when the invoice arrived)
• What your payroll obligations are for the next 8 weeks
• What equipment purchases or major expenses are coming
• What your bank balance will be on any specific date in the future

Your generic CPA isn't solving this because they're giving you backward-looking reports:

• Income statement shows what happened last month
• Balance sheet shows your position as of last month-end
• A/R aging report shows what people owe you, but not when they'll actually pay

None of these tools tell you what your cash position will be next Thursday when that $85,000 payment is due.

For construction-specific financial management: Construction Financial Planning

The "We're Profitable But Broke" Paradox That Kills Construction Companies

Here's a scenario playing out right now across the Des Moines metro:

HVAC contractor - Year-end financial results:

• Revenue: $2,400,000
• Cost of Goods Sold: $1,680,000
• Gross Profit: $720,000 (30% margin)
• Operating Expenses: $520,000
• Net Profit: $200,000 (8.3% margin)

Accountant's assessment: "Great year! Solid profitability. Strong margins."

Owner's reality:

• Missed payroll twice (had to use personal credit cards)
• Constantly juggling vendor payments
• Can't take on new projects because they're out of working capital
• Bank balance rarely exceeds $40,000 despite "making $200,000"
• Constantly stressed about cash

What happened to the $200,000 profit?

It's trapped in:

• Accounts receivable: $285,000 outstanding (42 days average collection)
• Work-in-progress: $95,000 in costs incurred but not yet billed
• Inventory: $32,000 in materials purchased for upcoming jobs
• Equipment purchases: $85,000 in new equipment bought during the year
• Debt payments: $48,000 in principal payments on equipment loans
• Owner distributions: $55,000 taken out for personal expenses and taxes

Add it up: That's $600,000. The business generated $200,000 in profit but needed $600,000 in cash for operations, growth, and distributions.

The gap is the problem. And it's invisible on your income statement.

This is why profitable contractors miss payroll. This is why strong businesses can't grow. This is why the stress never ends despite "good numbers."

You need to forecast cash flow independently from profitability. They're related but not identical.

Understanding contractor finances: Financial Management for Contractors

The Seasonal Cash Flow Disasters Construction Contractors Don't Anticipate

Construction work is seasonal. Everyone knows this. But most Des Moines contractors don't translate seasonal revenue patterns into cash flow forecasts—and it destroys them.

Typical Des Moines area construction seasonal pattern:

Q1 (Jan-Mar):

• Revenue: Low (15-20% of annual revenue)
• Costs: Moderate (maintaining crew, equipment, overhead)
• Cash flow: Negative $40,000-80,000 per month

Q2 (Apr-Jun):

• Revenue: Building (30-35% of annual revenue)
• Costs: High (ramping up crews, materials, equipment)
• Cash flow: Breaking even to slightly positive

Q3 (Jul-Sep):

• Revenue: Peak (35-40% of annual revenue)
• Costs: Highest (full crews, maximum activity)
• Cash flow: Positive $60,000-100,000 per month

Q4 (Oct-Dec):

• Revenue: Declining (10-15% of annual revenue)
• Costs: Declining but sticky (harder to cut than to add)
• Cash flow: Negative $20,000-60,000 per month

What this means: Even with strong annual profitability, you'll have 5-6 months of negative cash flow. If you're not forecasting this and building cash reserves during Q3, you'll hit Q1 and have a crisis.

Most contractors' approach:

• Do great in summer
• Spend freely because "business is good"
• Take larger owner distributions
• Buy equipment
• Hire more people
• Hit January with $35,000 in the bank
• Panic for 12 weeks

Strategic approach:

• Forecast the seasonal pattern in July
• Recognize Q3 cash generation needs to fund Q1-Q2 operations
• Build $150,000-200,000 cash reserve by October
• Navigate Q1-Q2 smoothly because you planned for it
• Repeat annually

This requires forecasting, not just checking your bank balance.

More on seasonal management: Construction Cash Flow Management

The 13-Week Cash Flow Forecast Framework: What It Is and Why It Works

Why 13 Weeks Is the Optimal Forecasting Window

Why not forecast monthly? Monthly forecasts obscure the weekly timing issues that cause cash flow crises. A monthly forecast might show "positive $25,000 cash flow in March," but it doesn't show you that Week 2 of March has $140,000 in expenses and only $60,000 in receipts—creating an $80,000 shortfall that week even though the month averages out positive.

Why not forecast daily? Daily forecasts are too granular and time-consuming. The precision isn't worth the effort for most construction companies. You need to know your position at the week level, not the day level.

Why not forecast 6 months or annually? Longer forecasts become increasingly speculative. You can reasonably predict what's happening in the next 13 weeks with good accuracy. Beyond that, too many unknowns enter the picture. The forecast becomes a guess rather than a planning tool.

13 weeks (approximately 3 months) is the sweet spot:

• Long enough to see patterns and anticipate problems
• Short enough to maintain accuracy
• Aligns with quarterly business planning cycles
• Provides time to take corrective action before problems become crises

The power of rolling forecasts: You update the forecast every week. This week, you're forecasting Weeks 1-13. Next week, you drop the week that just ended and add Week 14. You always have 13 weeks of forward visibility.

This transforms cash flow management from "reacting to what happened" to "preparing for what's coming."

The Five Core Components of Construction Cash Flow Forecasts

A proper 13-week cash flow forecast tracks five categories:

Component 1: Operating Cash Receipts

• Progress payment receipts from active projects
• Final payment receipts from completed projects
• Service work invoices paid
• Retention releases
• Change order payments
• Other operating receipts

Component 2: Operating Cash Disbursements

• Payroll (broken into regular and burden separately)
• Subcontractor payments
• Material supplier payments
• Equipment rental payments
• Fuel and vehicle expenses
• Insurance payments
• Rent/facility payments
• Utilities and office expenses
• Other operating expenses

Component 3: Capital Expenditures and Financing

• Equipment purchases
• Vehicle purchases
• Loan principal payments
• Loan proceeds from new financing
• Line of credit draws and repayments

Component 4: Owner/Tax Items

• Owner distributions
• Tax payments (estimated quarterly taxes, payroll taxes)
• Shareholder loans to/from company

Component 5: Beginning and Ending Cash

• Beginning cash balance (from prior week)
• Total cash in
• Total cash out
• Ending cash balance (becomes next week's beginning balance)

Most contractors track none of this systematically. They know payroll is "every two weeks" and suppliers are "sometime this month," but they don't know the specific dates and amounts.

The 13-week forecast forces precision: What exact date? What exact amount?

Construction accounting that actually helps: Construction Accounting Services

The Weekly Forecast Update Cadence

This is not a "create once and forget" tool. The 13-week forecast is a living document you update weekly.

Every Monday morning (or Friday afternoon) process:

Step 1: Reconcile prior week's actuals (15 minutes)

• Compare forecasted cash receipts vs. actual deposits
• Compare forecasted cash disbursements vs. actual payments
• Identify variances and understand why they occurred
• Update running accuracy metrics

Step 2: Update current week forecast (10 minutes)

• Confirm any payments expected this week
• Adjust for any changes in timing
• Verify payroll amounts
• Check for any unexpected expenses

Step 3: Roll forward and add Week 14 (20 minutes)

• Drop the week that just ended
• Add Week 14 to maintain 13-week horizon
• Include any new information about projects, payments, or expenses
• Extend existing patterns forward

Step 4: Review critical weeks (10 minutes)

• Identify any weeks showing negative ending cash balance
• Flag any weeks with ending cash below your minimum threshold
• Determine action items to address problem weeks

Step 5: Take action on findings (varies)

• Accelerate collection efforts for specific invoices
• Adjust payment timing for non-critical vendors
• Arrange line of credit draws if needed
• Adjust owner distribution timing

Total weekly time investment: 55-90 minutes

Value of avoiding one missed payroll crisis: Immeasurable (avoiding bounced checks, employee trust issues, late fees, personal stress)

ROI on this time investment: 50x to 100x easily

Yet most contractors spend zero time on forward-looking cash flow forecasting. They spend hours dealing with crises that proper forecasting would have prevented.

Building Your First 13-Week Cash Flow Forecast: Step-by-Step

Step 1: Establish Your Starting Cash Position

This seems obvious but many contractors get this wrong.

Your starting cash balance should be:

• Bank account balance as of the forecast start date
• Plus: Outstanding deposits in transit
• Less: Outstanding checks not yet cleared
• Equals: Adjusted cash balance

Example:

• Bank balance (Friday close): $127,450
• Deposit in transit (mailed Thursday): $18,200
• Outstanding checks: -$31,200
• Starting cash position: $114,450

Don't use: The balance from your accounting software unless you know it's perfectly reconciled. Your QuickBooks cash balance might show $135,000 when your bank account actually has $114,450 because of timing differences.

Use the actual bank balance as your starting point, adjusted for known timing differences.

Step 2: Project Operating Cash Receipts Week-by-Week

This is where most contractors struggle. They know customers owe them $215,000, but they don't know when those customers will actually pay.

Framework for projecting receipts:

For each outstanding invoice or expected payment:

1. Identify the payment trigger date:
   • Progress billing: Date submitted + contract payment terms
   • Final payment: Date of final billing + retention terms
   • Service work: Invoice date + standard payment terms
   • Change orders: Date of approval + contract terms
2. Apply payment reliability factor:
   • Reliable payers: Use contract terms (if terms are 15 days, expect payment in 15 days)
   • Moderate payers: Add 7 days to contract terms
   • Slow payers: Add 15-20 days to contract terms
   • Problem payers: Don't forecast until you have confirmation
3. Assign to specific week:
   • Calculate expected payment date
   • Assign to the week containing that date
   • Use conservative estimates (when in doubt, push receipt one week later)

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This is tedious the first time you do it. After the first build, weekly updates take 15-20 minutes because you're just adjusting existing items and adding new ones.

For contractors with job costing systems: Job Costing Services

Step 3: Project Operating Cash Disbursements Week-by-Week

Operating disbursements fall into two categories:

Category 1: Regular, predictable expenses

These are easy to forecast because they occur on known schedules:

Payroll:

• Amount: Based on current crew size
• Timing: Every Friday, or biweekly on specific dates
• Example: $92,000 every other Friday (Weeks 2, 4, 6, 8, 10, 12)

Payroll burden (taxes, insurance, workers comp):

• Amount: Approximately 25-35% of payroll
• Timing: Due dates for payroll tax deposits (usually semi-weekly or monthly)
• Example: $23,000 on the 15th of each month (Weeks 2, 6, 10)

Rent/facility costs:

• Amount: Fixed per lease
• Timing: Due date specified in lease
• Example: $8,500 on the 1st of each month (Weeks 1, 5, 9, 13)

Insurance payments:

• Amount: Monthly or quarterly premiums
• Timing: Due dates on policies
• Example: $12,000 quarterly premium due Week 7

Vehicle/equipment leases:

• Amount: Fixed per lease agreements
• Timing: Due dates in lease contracts
• Example: $3,800 on the 10th monthly (Weeks 2, 6, 10)

Utilities, phones, software subscriptions:

• Amount: Relatively consistent month-to-month
• Timing: Various due dates
• Example: $4,200 spread across Weeks 1, 3, 5, 7, 9, 11, 13

Category 2: Variable, project-driven expenses

These require more analysis:

Subcontractor payments:

• Review subcontractor applications for payment
• Apply your payment terms (typically 7-15 days after approval)
• Assign to specific week

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Equipment rental payments:

• Review active equipment rentals
• Note billing cycles (weekly, monthly)
• Assign to appropriate weeks

Fuel and vehicle expenses:

• Use historical averages
• Spread evenly across weeks
• Adjust for known project intensity changes
• Example: $6,500 per week every week

The key is assigning every expense to a specific week—not just knowing you have "$85,000 in expenses this month."

Step 4: Project Capital and Non-Operating Items

Equipment purchases:

• List any planned equipment buys in the next 13 weeks
• Assign to specific week when payment will occur
• Example: Boom lift purchase $42,000 in Week 8

Loan payments:

• Review loan amortization schedules
• Include both principal and interest
• Assign to weeks when payments are due
• Example: Equipment loan payment $4,850 on 1st of each month

Line of credit activity:

• Forecast any planned draws or repayments
• Typically used to smooth cash flow gaps
• Example: Draw $50,000 in Week 3, repay $25,000 in Week 10

Owner distributions:

• Schedule planned owner draws
• Should align with cash availability
• Example: $15,000 distribution in Week 6 and Week 12

Tax payments:

• Estimated quarterly income taxes
• Property taxes
• Sales/use taxes
• Example: $28,000 quarterly estimated tax payment Week 1

These items often get forgotten in cash flow planning, but they can represent $50,000-100,000 in cash needs per quarter.

For tax planning strategies: Contractor Tax Planning

Step 5: Calculate Weekly Ending Cash and Identify Problem Weeks

Now you put it all together:

For each week:

Beginning Cash (from prior week ending)
+ Cash Receipts (all categories)
- Cash Disbursements (all categories)
= Ending Cash (becomes next week's beginning)

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This forecast is telling you something critical: Without intervention, you'll be $260,000 negative by Week 8.

This is exactly what the forecast is supposed to reveal. You have time to fix it.

Interpreting Your Forecast: What the Numbers Are Telling You

Red Flags and Warning Signs in Your 13-Week Forecast

Red Flag #1: Negative ending cash in any week

What it means: You don't have enough cash to cover expenses that week. Something has to give—delayed payments, accelerated collections, line of credit draw, or external financing.

Action required: Immediate attention. You need a plan to address this before it happens.

Red Flag #2: Ending cash below your minimum threshold

Every construction company should have a minimum cash threshold—typically 2-4 weeks of operating expenses. If your weekly burn rate is $95,000, your minimum threshold should be $190,000-380,000.

What it means: You're operating too close to the edge. One delayed payment puts you in crisis mode.

Action required: Build cash reserves or arrange standby financing.

Red Flag #3: Consistent negative trend over 6+ weeks

What it means: Your business is consuming more cash than it's generating. This isn't a timing issue—it's a structural problem.

Action required: Revenue problem, expense problem, or collection problem needs diagnosis and solution.

Red Flag #4: High dependency on single large receipts

If your forecast shows your cash position improving dramatically because of one $150,000 payment, that's risky.

What it means: If that payment gets delayed, your entire cash position collapses.

Action required: Diversify your project base or build reserves to absorb payment delays.

Red Flag #5: Seasonal cliff approaching

If you're in November with strong cash and your forecast shows January-February destroying that position, you're headed for seasonal crash.

What it means: You need to build reserves now for the lean period coming.

Action required: Limit distributions, delay purchases, build cash reserves while you can.

The Five Actions You Can Take to Fix Problem Weeks

When your 13-week forecast reveals cash flow problems ahead, you have five levers to pull:

Lever 1: Accelerate Cash Receipts

Tactics:

• Call customers with outstanding invoices and request expedited payment
• Offer early payment discounts (1-2% for payment within 7 days)
• Submit progress billings earlier in the billing cycle
• Request partial advance payments on upcoming projects
• Bill change orders immediately rather than waiting for monthly billing

Example: Week 2 shows -$10,450 ending cash. You call the customer with the $42,000 invoice due Week 1 and request they expedite payment. If they pay in Week 2 instead of Week 1, that fixes your Week 2 problem.

Lever 2: Delay Cash Disbursements

Tactics:

• Negotiate payment terms with vendors (ask for Net 45 instead of Net 30)
• Prioritize critical suppliers and delay non-critical payments
• Spread large purchases across multiple weeks instead of one payment
• Delay owner distributions until cash position improves
• Postpone equipment purchases if possible

Example: Week 3 shows -$69,750 ending cash. You have $43,200 in material supplier payments due that week. You call your two largest suppliers and negotiate 15-day extensions. This moves $43,200 from Week 3 to Week 5, solving your Week 3 problem (though creating a Week 5 problem you'll need to address).

Important: Only delay non-critical payments. Never delay payroll. Never delay payroll taxes. Never destroy supplier relationships over short-term cash problems.

Lever 3: Access Credit Facilities

Tactics:

• Draw on line of credit to bridge temporary gaps
• Use equipment financing to spread cash outflows
• Consider invoice factoring for immediate cash against receivables
• Arrange vendor financing for large material purchases

Example: Weeks 2-5 all show negative cash. You draw $100,000 from your line of credit in Week 2. This eliminates the negative cash position and you repay the line when large receipts hit in Weeks 6-7.

This is what lines of credit are for—bridging temporary timing gaps, not funding structural cash problems.

Lever 4: Reduce Operating Burn Rate

Tactics:

• Delay hiring plans
• Reduce overtime if possible
• Postpone discretionary spending
• Eliminate or reduce bonuses temporarily
• Cut back on non-essential subscriptions/services

Example: Your forecast shows consistent $95,000 weekly burn rate. You identify $8,000 per week in overtime that's discretionary. Eliminating this reduces burn to $87,000, improving cash position by $8,000 per week ($104,000 over 13 weeks).

Lever 5: Inject Capital

Tactics:

• Owner investment/loan to company
• Bring in outside investor
• Sell unnecessary equipment or assets
• Consider SBA working capital loan

Example: Your forecast shows seasonal cash crunch from Weeks 1-8 totaling -$260,000. You arrange an SBA working capital loan for $150,000, reducing the deficit to -$110,000, which you can manage with line of credit draws and collection timing adjustments.

The power of forecasting: You can pull these levers proactively in Week 1 to prevent problems in Week 6. Without forecasting, you're pulling them reactively in Week 6 when you're already in crisis—and your options are more limited and expensive.

Advanced Cash Flow Forecasting Strategies for Des Moines Contractors

Strategy 1: Project-Level Cash Flow Forecasting

Basic 13-week forecast aggregates all projects into company-wide cash flow. Advanced approach forecasts cash flow by individual project, then rolls up to company level.

Why this matters:

Scenario: Your company-wide forecast shows positive cash flow. But Project A is generating $150,000 in receipts while burning $180,000 in costs (-$30,000), and Project B is generating $95,000 in receipts while burning $65,000 in costs (+$30,000).

Company-wide, it looks break-even. But Project A is consuming cash and Project B is generating it.

Problems this reveals:

• Project A might be under-billing relative to costs (need to accelerate billing)
• Project A might have cost overruns (need job cost analysis)
• Project A might have collection problems (need to focus collection efforts)
• Project B's excess cash generation might be front-loading that will reverse later

Project-level forecasting implementation:

For each active project, forecast:

1. Expected progress billings (amounts and dates)
2. Expected receipts (billing dates + payment terms)
3. Expected labor costs (crew hours × rates by week)
4. Expected material costs (purchase orders and delivery timing)
5. Expected subcontractor costs (sub billings + your payment timing)
6. Expected equipment costs (rentals and allocations)

Result: You see each project's cash contribution weekly, allowing you to:

• Identify cash-consuming projects before they create crises
• Accelerate billing on projects where you're under-billed
• Focus collection efforts on projects with delayed payments
• Make intelligent decisions about which projects to prioritize

This level of detail matters most for contractors managing 5+ simultaneous projects with varying sizes and cash characteristics.

For job costing integration: Construction Job Costing

Strategy 2: Scenario Planning and Sensitivity Analysis

Your base forecast assumes everything goes as planned. Reality rarely cooperates.

Build three scenarios:

Scenario 1: Base Case (50% probability)

• Everything occurs as expected
• Receipts arrive per contract terms
• Costs track to budget
• No major surprises

Scenario 2: Optimistic Case (25% probability)

• Key receipts arrive 7 days early
• Cost efficiencies materialize
• New project wins arrive sooner than expected
• Ending cash 20-30% higher than base case

Scenario 3: Pessimistic Case (25% probability)

• Key receipts delayed 14 days
• Cost overruns on major project
• Equipment breakdown requires unplanned expense
• Ending cash 30-40% lower than base case

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What this tells you: Even in the optimistic scenario, you have cash problems in Week 3. In the pessimistic scenario, you're completely underwater by Week 2.

Action: You need to address this NOW, not wait to see which scenario plays out. The base case alone isn't good enough—you need solutions that work even in the pessimistic scenario.

Scenario planning prevents surprises. When that big payment gets delayed (pessimistic scenario), you're not scrambling—you already have a contingency plan.

Strategy 3: Integration with Progress Billing and Job Costing

Most powerful approach: Your 13-week cash flow forecast should be tightly integrated with your job costing and progress billing systems.

The integration loop:

Job costing feeds forecast →

• Costs incurred to date by project
• Estimated costs to complete by project
• Labor, material, and sub payment timing

Progress billing feeds forecast →

• Billing schedule by project
• Billing amounts based on percentage complete
• Expected receipt dates based on contract terms

Forecast feeds job costing and billing →

• Reveals under-billing situations (need to accelerate billing)
• Identifies cost overruns early (costs exceeding budget before job is far along)
• Shows project cash contribution (which jobs generate cash vs. consume it)

Example - West Des Moines Electrical Project:

From job costing:

• Budgeted cost: $242,000
• Costs incurred to date: $165,000
• Estimated to complete: $77,000
• Total estimated cost: $242,000 (on budget)

From progress billing:

• Contract value: $285,000
• Billed to date: $180,000 (63%)
• Percentage complete: 68% ($165K / $242K)
• Status: Under-billed by 5 percentage points

Cash flow forecast insight:

• You're 68% complete but only 63% billed
• This represents $14,250 in work performed but not yet billed
• You should accelerate next progress billing
• Next billing should be larger than normal to catch up

Without integration, your job costing says you're on budget, your billing seems fine, but your cash flow is suffering because you're behind on billing. The integrated view reveals this immediately.

For integrated construction accounting: Construction Accounting Solutions

Strategy 4: The Rolling 13-Week Process with Monthly Reset

Weekly updates maintain the forecast, but monthly resets ensure accuracy:

Week 1-4 updates:

• Adjust timing of receipts/disbursements
• Add new information
• Roll forward one week, drop prior week, add new week 14

End of Month 1 reset:

• Reconcile all forecast vs. actual for the full month
• Calculate forecast accuracy (forecast vs. actual variances)
• Update assumptions based on actual results
• Refresh Weeks 5-17 with improved estimates
• Document lessons learned (what assumptions were wrong and why)

This monthly reset process improves forecast accuracy over time. You learn:

• Which customers consistently pay late (adjust future estimates)
• Which expense categories you under-estimate (adjust future forecasts)
• Seasonal patterns in your specific business
• How accurate your project completion estimates are

After 6 months of this process, your forecast accuracy should improve from ±30% to ±10%. This transforms the forecast from "rough guess" to "reliable planning tool."

Common Cash Flow Forecasting Mistakes Des Moines Contractors Make

Mistake #1: Forecasting Based on Contract Terms Instead of Actual Payment History

The problem: Your contract says "Net 15 payment terms." Your forecast assumes payment 15 days after billing. The customer consistently pays in 35-40 days.

Result: Your forecast shows positive cash in Week 3. Reality delivers negative cash because the payment doesn't arrive until Week 6. Your forecast is useless.

The fix:

Track actual payment history by customer.

Use actual history, not contract terms, for forecasting. Customer C might have Net 15 terms, but forecast 38 days. When they surprise you by paying in 30 days, that's a good problem—extra cash earlier than expected. But forecasting 15 days and experiencing 38 days is a disaster.

Better to be pleasantly surprised by early payment than destroyed by late payment.

Mistake #2: Ignoring Payroll Burden in Cash Flow Timing

The problem: Contractors forecast payroll costs but forget that payroll burden (taxes, insurance, workers comp) comes due on different schedules.

Example of how this kills you:

Week 1: Pay $92,000 in payroll. Forecast captures this.

Week 2: Federal payroll tax deposit due (approximately $18,400 for Social Security, Medicare, and withholding). NOT in forecast. Surprise $18,400 cash outflow.

Week 4: State unemployment tax quarterly payment due ($3,800). NOT in forecast. Surprise $3,800 cash outflow.

Week 5: Workers comp quarterly audit and payment ($12,500). NOT in forecast. Surprise $12,500 cash outflow.

Total surprise cash outflows: $34,700

These aren't unexpected expenses—they're predictable obligations tied to payroll. But because they occur on different schedules than payroll itself, contractors forget to forecast them.

The fix:

Track payroll burden separately in your forecast:

• Federal payroll taxes: Due semi-weekly (for most contractors) or monthly
• State withholding taxes: Monthly or quarterly depending on state
• Unemployment taxes: Quarterly
• Workers comp premiums/audits: Quarterly or annually with monthly accrual
• Health insurance: Monthly
• 401(k) contributions: Per payroll or monthly

Assign each to specific weeks when payments are due. Your "payroll" line in the forecast should include:

• Gross payroll (Week 1, 3, 5, 7, 9, 11, 13 if biweekly)
• Payroll taxes (Weeks 2, 6, 10 for federal; Weeks 3, 7, 11 for state)
• Workers comp (Week 4 for quarterly audit)
• Benefits (Weeks 1, 5, 9, 13 for monthly)

This adds $25,000-40,000 in cash requirements that contractors frequently overlook, causing "surprise" cash crunches mid-month.

For payroll and benefits management: Contractor Payroll Services

Mistake #3: Treating Line of Credit as Infinite Cash Source

The problem: Contractors build forecasts showing significant negative cash, then casually note "we'll just draw on our line of credit" without considering:

• Line of credit limits
• How much is already drawn
• Repayment requirements
• Interest costs

Example:

Line of credit: $250,000 limit

‍Currently drawn: $180,000

‍Available capacity: $70,000

Forecast shows: Need to draw $150,000 in Weeks 3-5 to cover cash gaps

Reality: You only have $70,000 available. Where's the other $80,000 coming from?

The fix:

Your forecast should include a line of credit tracking section.

This forecast reveals: By Week 3, you've maxed out your line. If Week 4 has a cash shortfall, you can't access more credit. You need a different solution.

Too many contractors discover they've maxed out their credit line when they're in crisis mode and desperately need cash. The forecast reveals this problem weeks in advance, giving you time to:

• Arrange additional financing
• Accelerate collections more aggressively
• Reduce expenses
• Adjust payment timing

Line of credit is a tool, not a solution. It bridges temporary gaps. It doesn't fix structural cash flow problems.

Mistake #4: Failure to Forecast Seasonal Patterns

The problem: Contractors build 13-week forecasts that look fine, but they don't consider that Week 8 of their forecast is January 15 and Weeks 9-13 are deep winter with minimal revenue.

Example - HVAC Contractor Forecast Built in November:

• Weeks 1-4: Building cash
• Weeks 5-8: Slightly declining
• Weeks 9-13: Dropping $125,000

What happens in Weeks 14-20 (not shown in this forecast)? If the pattern continues, you'll be negative cash by Week 16.

The fix:

Always consider seasonality when interpreting forecasts:

If you're forecasting in:

• Summer (Jun-Aug): Next 13 weeks look great (peak season), but consider what happens in weeks 14-26 (fall/winter)
• Fall (Sep-Nov): Next 13 weeks show decline, and it gets worse in weeks 14-26 (winter)
• Winter (Dec-Feb): Next 13 weeks are brutal, but improvement comes in weeks 14-26 (spring)
• Spring (Mar-May): Next 13 weeks show improvement and strengthening

For seasonal contractors specifically, build 26-week forecasts twice per year:

• August: Forecast through February (peak season through slow season)
• February: Forecast through August (slow season through peak season)

This ensures you build cash reserves during peak season to survive slow season—rather than spending everything in summer and panicking in January.

For seasonal cash flow management: Construction Seasonal Planning

The Cash Flow Forecasting Template: Build Your Own 13-Week Forecast

Let me provide you with a practical template structure you can build in Excel or Google Sheets:

Template Structure

Sheet 1: 13-Week Summary

Headers across the top (Columns):

• Week Number (1-13)
• Week Ending Date
• Days Until (auto-calculated from today)

Rows (by category):

CASH RECEIPTS

• Progress Billing Receipts
• Final Payment Receipts
• Service Work Receipts
• Retention Releases
• Change Order Receipts
• Other Receipts
• TOTAL RECEIPTS

OPERATING DISBURSEMENTS

• Payroll - Gross Wages
• Payroll - Taxes & Burden
• Subcontractor Payments
• Material Suppliers
• Equipment Rentals
• Fuel & Vehicle Expenses
• Insurance
• Rent/Facilities
• Utilities & Office
• Professional Services
• Marketing & Business Development
• Other Operating Expenses
• TOTAL OPERATING DISBURSEMENTS

CAPITAL & NON-OPERATING

• Equipment Purchases
• Vehicle Purchases
• Loan Principal Payments
• Line of Credit Draws
• Line of Credit Repayments
• Owner Distributions
• Tax Payments (Estimated, Property, etc.)
• TOTAL CAPITAL & NON-OPERATING

CASH FLOW SUMMARY

• Beginning Cash Balance
• Total Cash In (receipts)
• Total Cash Out (all disbursements)
• Net Cash Flow (in minus out)
• ENDING CASH BALANCE

Sheet 2: Receivables Detail

This sheet lists all outstanding and expected invoices with:

• Customer name
• Project name
• Invoice/billing date
• Invoice amount
• Payment terms
• Expected payment date
• Assigned forecast week
• Status (Outstanding / Expected)
• Notes

Sheet 3: Payables Detail

Lists all bills and expected expenses with:

• Vendor name
• Invoice/PO number
• Invoice date
• Amount due
• Payment terms
• Due date
• Assigned forecast week
• Priority (Critical / Standard / Flexible)
• Notes

Sheet 4: Project Billing Schedule

For each active project:

• Project name
• Contract value
• Billed to date
• Percentage complete
• Next billing date
• Expected billing amount
• Expected receipt date (billing date + terms)
• Assigned forecast week

Sheet 5: Actual vs. Forecast

Each week, record:

• Forecasted receipts for the week
• Actual receipts for the week
• Variance (actual - forecast)
• Forecasted disbursements
• Actual disbursements
• Variance
• Forecasted ending cash
• Actual ending cash
• Variance

Track accuracy metrics:

• Average variance (absolute value)
• Percentage accuracy
• Trend line (improving or declining accuracy)

Building Your First Forecast (90-Minute Process)

Minutes 1-20: Gather data

• Current bank balance
• All outstanding invoices (pull A/R report)
• All unpaid bills (pull A/P report)
• Project billing schedules
• Payroll schedule
• Recurring expense list

Minutes 21-40: Input receipts

• Enter all outstanding invoices with expected payment dates
• Enter all upcoming progress billings
• Assign each to specific forecast week
• Include retention releases if applicable

Minutes 41-60: Input disbursements

• Enter all unpaid bills with due dates
• Enter payroll schedule for next 13 weeks
• Enter recurring expenses (rent, insurance, etc.)
• Include any planned equipment purchases or major expenses

Minutes 61-75: Review and validate

• Check that all weeks have entries
• Verify payroll is included every appropriate week
• Confirm recurring expenses don't have gaps
• Validate formulas are calculating correctly

Minutes 76-90: Analyze results

• Identify any weeks with negative ending cash
• Note weeks below minimum cash threshold
• Determine action items for problem weeks
• Document key assumptions

After first build: Weekly updates take 15-25 minutes, not 90.

Taking Action on Your Forecast: The Weekly Cash Flow Management Meeting

The forecast is useless if you don't act on it. Here's the weekly discipline that turns forecasting into results:

Monday Morning 15-Minute Cash Flow Review

Every Monday at 9:00 AM (or Friday at 4:00 PM if you prefer end-of-week):

1. Review prior week actuals (5 minutes)

• What receipts were forecast vs. actual?
• What disbursements were forecast vs. actual?
• What caused variances?
• Update forecast accuracy tracking

2. Confirm current week forecast (3 minutes)

• Any receipts expected this week?
• Any large disbursements this week?
• Is ending cash balance acceptable?

3. Review critical upcoming weeks (5 minutes)

• Any problem weeks in next 4 weeks?
• Any weeks below minimum cash threshold?
• Any large receipts at risk of delay?

4. Assign action items (2 minutes)

• Collection calls needed this week?
• Any payments needing delay negotiation?
• Any line of credit draws needed?

This 15-minute meeting every week prevents 99% of cash flow crises.

Monthly Strategic Cash Flow Planning

First Monday of each month (30-45 minutes):

1. Review full 13-week forecast

• Identify overall cash trajectory
• Note seasonal patterns approaching
• Assess adequacy of cash reserves

2. Scenario planning

• What if key receipt is delayed 2 weeks?
• What if project costs overrun by 15%?
• What if new project is delayed?
• Do you survive these scenarios?

3. Strategic decisions

• Can you afford planned equipment purchase?
• Should you take on new project given cash position?
• Are owner distributions sustainable?
• Do you need to arrange additional financing?

4. Update assumptions

• Adjust customer payment timing assumptions
• Update vendor payment terms
• Revise project completion estimates
• Refresh seasonal patterns

This monthly deep dive ensures you're thinking strategically, not just tactically.

For comprehensive financial management: Construction Financial Advisory

The Results: What Changes When You Forecast Cash Flow Systematically

Let's make this concrete with before/after comparison:

Before implementing 13-week cash flow forecast:

Scenario: Des Moines plumbing contractor, $3.2M annual revenue, 8-12 active projects

Cash management approach:

• Check bank balance every few days
• Hope customers pay on time
• Scramble when cash runs low
• Constantly stressed about making payroll

Results:

• Missed payroll twice in past 18 months (used personal funds)
• Line of credit maxed out three times
• Delayed vendor payments regularly (damaged relationships)
• Turned down profitable project because "couldn't afford it" (actually could have, with proper planning)
• Owner stress level: 9/10 constantly

After implementing 13-week cash flow forecast (six months in):

Cash management approach:

• Updated forecast every Monday (20 minutes)
• Monthly strategic review (45 minutes)
• Proactive collection management
• Strategic payment timing
• Planned line of credit usage

Results:

• Zero missed payrolls (saw potential problems 3-4 weeks in advance)
• Line of credit used strategically for short-term gaps, never maxed
• Vendor payments on time (improved pricing from two major suppliers)
• Took on $485,000 additional project with confidence (forecast showed it fit within cash capacity)
• Built $125,000 cash reserve for seasonal slowdown
• Owner stress level: 3/10 (only spikes when forecast shows problems, but those problems get addressed proactively)

Quantifiable improvements:

• $280,000 additional revenue (project they would have turned down)
• $18,500 in improved supplier pricing (better payment history)
• $4,200 in avoided late fees and interest
• Zero personal funds used for business cash crunches
• 25 hours of owner time saved (less time scrambling, more time planning)

Total value: $300,000+ in 6 months from a process requiring 2 hours per month

This is the power of forecasting. It's not about predicting the future perfectly—it's about seeing problems early enough to fix them.

Why Your Generic CPA Isn't Providing This (And Why Construction Specialists Do)

Here's what your generic CPA provides:

Monthly financial statements (4-6 weeks after month-end):

• Income statement (shows what happened last month)
• Balance sheet (shows position as of last month)
• A/R aging (shows what's owed as of last month)

All backward-looking. None forward-looking.

When you ask "Can I afford this equipment purchase?" they look at your balance sheet and say "Your equity position supports it" or "You have the cash today."

They're not answering the right question. The question isn't "Do I have cash today?" The question is "Will I have cash in Week 6 after this purchase, when I also have $140,000 in other commitments?"

Generic CPAs don't forecast because:

1. They're not trained in forward-looking cash management
2. They don't understand construction billing and collection cycles
3. They don't know your project schedules and billing patterns
4. They think "accounting" means recording what happened, not predicting what will happen

Construction accounting specialists forecast because:

1. We understand construction cash flow is different from other businesses
2. We know project billing schedules drive cash timing
3. We integrate job costing with billing with cash forecasting
4. We recognize that profitable contractors can still have cash crises
5. We've seen contractors fail due to cash flow despite strong margins

The difference:

Generic CPA conversation:

• Contractor: "Should I buy this $75,000 excavator?"
• CPA: "You have $130,000 in cash and strong equity. Should be fine."
• Result: Contractor buys excavator, gets blindsided by cash crunch 3 weeks later

Construction specialist conversation:

• Contractor: "Should I buy this $75,000 excavator?"
• Specialist: "Let's look at your 13-week forecast. You have $130K today, but Week 4 shows $45K ending cash, and Week 6 shows negative $28K before the excavator purchase. If you buy the excavator in Week 2, your Week 6 position becomes negative $103K. We need to either delay the purchase to Week 8, accelerate collections on these three invoices, or draw on your line of credit. Here are the cash flow implications of each option."
• Result: Contractor makes informed decision based on full cash picture

One approach prevents crises. The other causes them.

This is why construction accounting specialization matters: Why Contractors Need Specialized CPAs

Your Next Steps: Implementing Cash Flow Forecasting in Your Des Moines Construction Company

Option 1: Build It Yourself

This article provides everything you need:

• Template structure
• Process steps
• Weekly update cadence
• Monthly review framework

You can implement this internally if you:

• Have 90 minutes to build initial forecast
• Can commit to 20 minutes weekly for updates
• Have basic Excel/Google Sheets skills
• Have access to your project billing schedules and A/R A/P data

Expected timeline: First useful forecast in 2 hours, fully refined process in 30 days

Option 2: Get Construction Accounting Support

If your current CPA doesn't provide forward-looking cash flow forecasting, you're missing critical financial management.

Performance Financial LLC provides:

• 13-week rolling cash flow forecasts
• Monthly forecast review and strategic planning
• Integration with job costing and progress billing
• Scenario planning and sensitivity analysis
• Action plans for addressing problem weeks

We work with construction contractors throughout Des Moines, Ankeny, West Des Moines, Johnston, Grimes, Clive, Waukee, and the surrounding Iowa/Midwest region.

We specialize in construction-specific accounting because we understand:

• Project billing cycles and cash timing
• Seasonal patterns in construction
• How job costing integrates with cash forecasting
• What drives construction company cash flow

Schedule a Tax Reduction Analysis: Book Consultation

Option 3: Start with the Template

Download our 13-week cash flow forecast template (available at Performance Financial website) and start tracking your cash position systematically.

Even a basic forecast is infinitely better than no forecast. You'll immediately see:

• Problem weeks approaching
• Collection priorities
• Payment timing opportunities
• Whether you can afford planned purchases

Most Des Moines contractors who start forecasting never go back—the visibility is too valuable to give up.

Final Thoughts: Cash Flow Forecasting as Competitive Advantage

Two Des Moines electrical contractors. Similar revenue. Similar margins. Similar backlog.

Contractor A: No cash flow forecasting. Checks bank balance reactively. Constantly stressed. Missed payroll once this year. Turned down a $340,000 project because "we can't afford to take on more work right now."

Contractor B: Maintains 13-week rolling forecast. Reviews weekly. Plans proactively. Never missed payroll. Took on the $340,000 project with confidence because the forecast showed exactly how it fit within cash capacity.

One year later:

• Contractor A: $2.8M revenue, struggling with cash, stressed
• Contractor B: $3.2M revenue, healthy cash reserves, confident

The difference: Contractor B had visibility. They could make strategic decisions based on data instead of gut feel. They could identify problems 4-6 weeks in advance and fix them. They could confidently say "yes" to growth opportunities because they understood their cash capacity.

This is the power of cash flow forecasting.

Most Des Moines contractors treat cash flow management as "check the bank balance and hope for the best." The contractors who systematically forecast cash flow have a massive competitive advantage—they can grow faster, bid more competitively (because they understand their working capital needs), and sleep better at night.

You can be Contractor B. The frameworks in this article work. The template is straightforward. The weekly process takes 20 minutes.

The only question is whether you'll implement it—or whether you'll keep checking your bank balance and hoping tomorrow is better than today.

Des Moines contractors who want to stop scrambling and start managing have everything they need right here.

The question is whether you'll use it.

About Performance Financial LLC

Performance Financial is a Des Moines-based CPA and accounting firm specializing in construction contractors, builders, and construction-related businesses throughout Iowa and the Midwest. Unlike generic CPAs who provide backward-looking compliance work, we provide forward-looking financial management including cash flow forecasting, job costing, tax planning, and strategic business advisory.

We work with electricians, HVAC contractors, plumbers, general contractors, landscapers, and other construction trades across the Des Moines metro area including Ankeny, West Des Moines, Johnston, Grimes, Clive, Waukee, and Pella.

Services: Construction Accounting Services

Contact: Schedule Consultation

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Ready to stop missing payroll and start managing cash flow strategically? Schedule your Tax Reduction Analysis with Performance Financial today. No cost, no obligation—just a conversation about whether your accounting provides the forward-looking insights your construction business needs.

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