Construction CFO Services for Electrical Contractors

Wire and conduit pricing moves between the day you bid and the day you buy. On a lump-sum contract, that movement is yours. We install a material exposure report that lists, by job, the material budget at bid, the quote expiration dates from your distributor, the purchase orders issued, and the dollars still unpurchased and therefore still exposed. It is reviewed weekly with the estimator and the purchasing lead. The question each week is simple: what has not been bought, and what would it cost to buy it today.

The report drives three decisions. First, whether to lock a distributor price on award rather than at rough-in. Second, whether an escalation clause belongs in your proposal for jobs with a long start date, and how to word the trigger so the owner accepts it. Third, whether early purchase and storage of gear is cheaper than the price risk, once carrying cost and stored materials billing are counted. Most electrical contractors already know the copper index. Fewer know how much of their backlog is unbought.

• Material exposure report by job: budget, quoted, purchased, and open
• Distributor quote expiration calendar
• Escalation clause language reviewed with your attorney before use
• Buy-early analysis with carrying cost and storage billing included

Switchgear, transformers, generators, and lighting packages often arrive months before installation. Most contracts allow billing for stored materials on the pay application, provided the backup is in order: a paid invoice or bill of sale, evidence of insurance, a storage location the owner can inspect, and a signed transfer of title. We build that packet into the pay app checklist so stored gear is billed the month it lands, not the month it is set.

The accounting matters as much as the billing. Stored materials billed but not installed are a cost in inventory or a job cost with matching earned revenue depending on the contract terms and your revenue recognition policy, and the WIP schedule must treat them consistently or percent complete is wrong. We set the policy, document it, and apply it the same way on every job, which is what your CPA and your surety will ask about at year end. A generator in the yard that was never billed is a loan you made to the owner at no interest.

An electrical contractor with a service department is running two companies with one bank account. Construction earns margin on estimating and project execution over months. Service earns margin on dispatch efficiency, technician utilization, and pricing per call, over hours. Blending them produces a gross margin that is wrong for both. We separate them into divisions with their own revenue, direct labor, material, vehicle, and allocated overhead, and report each with its own metrics.

For the construction division the metrics are the standard ones: earned revenue, margin fade, labor hours to estimate, and cash conversion by job. For the service division we track billable hours per technician per day, average invoice, first-visit completion rate, callback rate, and material markup realized. Service work that is actually warranty on a construction job gets charged back to that job, so the construction margin carries its own cost and the service margin is not quietly subsidizing it.

If you run ServiceTitan or a similar dispatch platform, we tie its job data to the accounting system so the service P&L is a report, not a spreadsheet. Overhead allocation follows a written method, usually direct labor dollars, and is reviewed once a year rather than argued every month. The same divisional structure carries into the annual budget, so next year's plan has a service target and a construction target instead of one number that both managers can disown.

Public work and many institutional projects require prevailing wage and weekly certified payroll. The labor burden on those jobs is not the same as your private work: fringe requirements, apprentice ratios, and classification rules change the loaded hourly cost by classification and by county. We compute burden rates for each classification you use, journeyman, apprentice at each step, foreman, and general foreman, and post labor to cost codes at the loaded rate so the job cost report reflects what the job costs.

Certified payroll goes out on the required schedule with a review step, because a late or inaccurate submission can hold a pay app. We also track the fringe portion paid in cash versus contributed to benefit plans, since the treatment affects both the burden rate and the payroll taxes you owe. Labor is 40 to 60 percent of most electrical jobs. Getting the burden rate wrong by a few dollars an hour is the difference between the estimate and the fade report.

Estimators bid with a burden rate. Accounting posts with a burden rate. On most electrical contractors we assess, the two rates were last reconciled during a previous administration.

Electrical job cost is a labor-hour business first and a dollar business second. The estimate was built in hours by task: rough-in, pulling wire, terminations, gear set, trim, and testing. We set the cost codes to match the estimate structure so foremen can report hours by task from the field, and the job cost report shows hours used versus hours estimated by phase every week. A job that is 60 percent through its hours and 40 percent through its rough-in tells you something no dollar report will.

Estimate to complete is updated monthly by the PM with the foreman's remaining-hours input, the material exposure report, and the open change order log in hand. Committed cost includes issued purchase orders and any subcontracted scopes such as fire alarm or low voltage. The WIP schedule is built from that ETC, reconciled to the general ledger, and posted with over and under billings each month. Change orders are logged with hours and material separately so the pricing can be defended and so unpriced field directives show up as a receivable at risk rather than as unexplained fade.

The 13-week cash forecast for an electrical contractor starts with pay app receipts by job and date, then layers in distributor payments on their terms, stored materials purchases, weekly payroll including certified payroll jobs, service division receipts by week, vehicle and equipment payments, and retainage releases. It is updated every Monday. The distributor line matters more than it does in most trades, because your largest vendor often extends more credit than your bank does, and the terms have conditions.

Backlog is reported by expected month of billing and by division, with gross profit in backlog and the months of overhead it covers. That schedule, the WIP, and the interim balance sheet make up the surety package, prepared quarterly and sent to your agent on a fixed calendar. Bank covenants are calculated monthly and forecast forward. In 90 days, the plan is a service P&L you believe, a material exposure number you check weekly, stored gear that gets billed, and a cash forecast that has replaced the bank balance as the way you decide things.