Frequent Billings for Remodeling Projects Chapel Hill NC

Even companies earning good profits can go out of business for lack of cash. Yet few remodelers take the trouble to align client payments with their own need to pay suppliers and subs within a week to 10 days. Those who do employ a variety of strategies to keep the cash flowing.

Frequent billings are the key to cash flow for Gary Stokes of ADR Builders in Timonium, Md. After receiving a deposit of 10% to 20%, Stokes bills biweekly for completed work and materials stored on site. Payments are updated on a schedule of values that includes an early-pay line item for general conditions.

Eric Borden of ESB Contracting, Toms River, N.J., likes to keep his subs happy. "I pay them a week after they submit an invoice," says Borden. "Some don't want to wait that long." To keep the cash flowing, Borden invoices clients on the third week of every month for completed work. Payments are due on receipt and the timing enables him to meet supplier discount deadlines.

On large projects, Borden avoids asking for a deposit. Instead, his fixed-price contract includes a schedule of values with a $25,000 line item for "mobilization," for which he bills immediately after obtaining permits. The schedule also breaks costs down into some 40 line items. Because Borden bills based on progress, the breakdown enables him to collect payment incrementally without having to complete an entire phase of construction.

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