Cash Flow Strategies For Contractors

As the construction market continues its slow recovery, now is a good time to review your cash flow strategies. Questions to consider:

  • How much bad debt can my company absorb before having a critical impact on my balance sheet and cash flows?
  • Who bears the risk of non-payment by the ultimate project owner? Do I have any “Pay If Paid” contracts?
  • How is this private project being financed? Has anyone seen a bank commitment letter?
  • What would happen if my receivables were stretched another 30-45 days on average?
  • What is my added exposure when I bond a job?
  • How do I know if my subcontractors are still financially viable?
  •  How long should I perform work without being paid? What does my contract allow for in terms of work stoppages for non-payment?

For companies that rely on bonding to secure work, a strong surety relationship can be a key competitive advantage. Do your homework before signing a contract.


Contact Mike at 317.805.7524 or email mike.marsella@mjinsurance.com. Visit www.mjinsurance.com.