Contractor Evolution 253. Cash Flow Q&A: Learn to Predict Your Profit in 2026 - Danny Kerr
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Dec 31, 2025 Struggling with cash flow? You’re not alone—many contractors face unpredictability! Discover strategies for matching deposits with costs to prevent profit funding. Learn how to create an effective annual budget and the importance of job costing to enhance financial health. Get tips on stabilizing owner pay and managing expenses, plus how to ensure timely customer payments. Danny also discusses how to evaluate hiring needs while keeping growth manageable. Dive into essential financial insights to prepare for 2026!
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Project Cash Flow In Cash Terms
- Track cash on a cash-accounting basis and project month-by-month for the next 3–6 months.
- Use projections to spot gaps early and secure a line of credit before you hit the red.
Match Payments To Production Costs
- Align deposits and progress payments with when labor, subs, and materials are spent.
- Collect payments ahead of production costs so jobs don't consume prior months' profit.
Growth Without Float Creates Risk
- Rapid growth can create cash gaps when progress payments lag 30–90+ days, especially in insurance or commercial work.
- You must align schedule capacity with cash float to avoid overcommitting and liquidity risk.