Profitable builders go under on cash, not on margin. Costs leave every week. Money comes back monthly, thirty days later, minus retention. This works out how deep that hole gets, which week it bottoms out, and how much you need in the bank to still be trading when the money lands.
The job
Contract value $
Margin %
Cost is the rest. Be realistic, not hopeful.
Duration, weeks
Cash in the bank now $
What this job can actually draw on
How the spend falls
Cost profile
Most jobs are the typical curve. Fitout is often back-loaded.
Up-front cost before the first claim $
Bonds, insurances, mobilisation, deposits on long-lead items
How you get paid
Claim every
Payment terms, days after claim
From claim date to money in the account, honestly
Retention held %
Withheld from each claim
Claims paid late by, weeks
Try 2. This is what actually happens.
This is a shape, not a bank statement. It assumes you get paid what you claim, that nothing is
disputed, and it ignores GST timing, variations, defects, and the wages you draw yourself.
Every one of those makes the hole deeper, never shallower. Use it to see whether the job is
fundable before you sign it — not as a substitute for a proper cash flow from your accountant.
The peak is measured after a week’s costs but before that week’s claim arrives,
because that is the order it happens in: the wages and the subbies go out first. The closing
balance in the table nets them, so the table will read higher than the peak in the week the money lands.
Questions
What is peak funding requirement?
The deepest point the cash position reaches before the money starts catching up. It is the amount you need available — in the bank, in an overdraft, or in a facility — to trade through the job. Builders who do not know this number find it out the hard way, usually about two thirds of the way through.
Why does the hole get deeper on bigger jobs?
Because the gap between spending and being paid scales with the job. A larger contract at the same margin, same terms and same retention needs proportionally more cash behind it. Winning a job too large for your balance sheet is a very common way for a profitable builder to fail.
What does retention do to cash?
It takes a slice off every claim and holds it, usually until practical completion and then partly to the end of the defects period. On a long job with a five per cent retention that is a substantial sum sitting with someone else for a year or more while you have already paid the costs it relates to.
Should I model late payment?
Yes. Set the late-payment field to two weeks and look at what happens to the peak. Payment terms are what the contract says; late payment is what happens. If the job only works when every claim is paid on the day it is due, it does not work.
Does this include GST?
No. Enter figures excluding GST. GST timing has its own effect on cash depending on your reporting cycle, and it is worth talking to your accountant about separately.
Cash gets dangerous when jobs overlap and one late claim moves every other job’s peak at the same time. The paid system tracks claims, approvals and retention against every project on one board, so the squeeze is visible weeks before it arrives.
This is a practical site-management tool. It is not legal, engineering or regulatory advice and does not guarantee compliance or a satisfactory inspection outcome. Requirements may vary by jurisdiction, project, contract and circumstances.
Want a person to look at it?
The tools above are free and yours to use. When you need the paperwork behind them reviewed by someone who has run sites, Obras HSE Services is a live consulting business in south-east Queensland.
SWMS review service — a marked-up review showing what is missing and why it matters.
