The jobs are booked, the crews are busy, and the P&L says you made money. So why is the checking account so thin? If your Maine construction cash flow never matches your reported profit, you’re not imagining it, and you’re not alone.
Contractors who also run a second business, say a development or equipment side, feel this most. Money moves between entities, bills come due before payments arrive, and the numbers you’re looking at are weeks old. Here are the five disconnects we see most often, and what to do about each.
A work-in-progress (WIP) schedule compares what you’ve billed on each job to how much work you’ve actually completed. Without it, you can’t tell which jobs are overbilled (you’re holding the customer’s cash) and which are underbilled (you’ve funded their work out of your pocket).
Inaccurate WIP also distorts profit. Estimated costs to complete get stale, change orders go unrecorded, and a job that looks 20% profitable at month-end turns out to be break-even. If you bill work over months, this also ties directly to your tax method; we covered the details in The Look-Back Method: What Contractors Need to Know.
Fix it: Update WIP monthly using current cost-to-complete estimates, and review it job by job.
A simple monthly habit helps: for every open job, compare percent billed to percent complete. Anything billed well ahead of completion deserves a cash reserve. Anything billed behind completion deserves a phone call and a pay application this week.
Every day between finishing work and sending an invoice is a day you’re financing the project. Late pay applications, missing lien waivers, and incomplete backup are the usual culprits.
Maine’s prompt payment statute helps only if you start the clock. Under 10 M.R.S. 1113, an owner’s payment on a private commercial project is generally due 20 days after the billing period closes or the invoice is delivered, whichever is later, unless the contract says otherwise, and interest can run on late amounts. Billing late pushes everything after it.
Fix it: Set a billing calendar, tie pay applications to field progress, and invoice the week work is complete.
For contractors running several jobs and a second entity, slow billing also hides in handoffs: the project manager waits on the field, the office waits on the project manager, and the owner waits on the bank. A written billing calendar with one named owner removes most of that drag.
Here’s the squeeze: on many Maine private projects, subcontractors and suppliers are due payment within 7 days of your receiving payment, and retainage you receive generally has to be passed through within 7 days, while retainage owed to you is typically released within 30 days after final acceptance (10 M.R.S. 1116). If your cash plan doesn’t account for those gaps, a profitable job can still drain your account.
Fix it: Track retainage receivable and payable separately, and build both into your cash forecast by job. (This is general information, not legal advice. Check your contracts and the statute.)
A new excavator or truck can create a large tax deduction, but the purchase still leaves your bank account on day one. Add loan payments, and you may be paying for equipment long before the tax savings show up.
Maine adds a wrinkle. For 2025, Maine conformed to the higher federal Section 179 expensing limits but decoupled from 100% bonus depreciation, according to the Governor’s determination. Maine’s budget materials describe continued decoupling going forward. That can mean a federal deduction that doesn’t carry over to your Maine return. See IRS Publication 946 for the federal rules.
If you own the shop or yard, a cost segregation study may be another lever. We explain it in A Cost Segregation Study Could Save You Six Figures.
Fix it: Before you buy, model the cash impact, the federal deduction, and the Maine deduction separately.
Most contractors can tell you what they billed last month. Far fewer can tell you what their bank balance will be in 60 days. Seasonal winters, uneven pay cycles, and lumpy equipment purchases make a forecast essential, not a nice-to-have. Our 90-Day Cash Flow Plan for Inventory-Heavy Businesses lays out the basic approach, and it works for project-based businesses too.
Fixing these five issues is exactly what our CFO Services & Coaching is built for. We connect your WIP, billing, retainage, and equipment plans into a rolling cash forecast, so you know what’s coming, what you can safely spend, and when to set cash aside for taxes. For owners with multiple entities, we forecast each one and the transfers between them.
Pairing the forecast with proactive tax planning and strategy keeps deductions from surprising you at year-end.
Pull your open jobs and ask three questions: Which are overbilled or underbilled? How much retainage is in play, both ways? What will my bank balance be 60 days from today? If you can’t answer all three, the gap is worth closing.
Ready to see where your cash is stuck? Book a cash flow review call or reach out to our team, and we’ll walk through your jobs with you.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
