Fractional CFO and Controller Services for Electrical Contractors

Wire, conduit, and gear are priced by the supplier on the day they ship, not the day you bid. On a job with a long lead between award and rough-in, that gap can consume the entire margin. The contract may allow an escalation clause; more often it does not, and the only protections are early buyout, supplier price holds, and a stored material billing that gets the owner to pay for gear sitting in your warehouse rather than leaving you to finance it.

Finance's job is to make the exposure visible before the purchase order is cut: a material commitment schedule by job, with quoted price, price hold expiration, expected ship date, and the billing event that recovers it. When gear ships and gets billed as stored material, the paperwork has to be right or the owner's lender rejects the line and the supplier invoice arrives anyway. We build the schedule, track the price holds, and make sure the pay application and the supplier invoice arrive in the right order.

The point is not to eliminate the risk. It is to know, job by job, how much of your margin depends on a commodity chart. That knowledge changes how you bid. A job with 60 percent material content and a nine-month lead gets an escalation clause or a higher margin, and the estimator can defend either one with the exposure history behind it.

Your estimator priced the job in labor units by phase: underground, rough-in, wire pull, trim, and testing. Your field reports hours by job. The moment those two views stop matching, the estimate becomes a document nobody looks at, and the job gets managed on the foreman's gut. The overrun surfaces at trim, when the only remaining options are to eat it or to argue.

We put the estimate into the job cost system as a phase-level labor budget, have the field code time to the same phases, and publish a weekly report by job showing hours used, percent complete by phase, hours to complete, and the projected variance. The foreman and PM see the second-floor overrun in week three rather than month four. Where a shop uses a percent-complete rather than a units-installed method, we set the rules and keep them consistent so the WIP does not swing every month.

Labor burden is calculated rather than assumed: payroll taxes, benefits, union or non-union fringe, tools, vehicle, and training. A shop that burdens at 25 percent when the real number is 38 is under-bidding every job it wins. We recalculate it quarterly and feed the current rate back to estimating, so the next bid carries this year's cost of a field hour rather than the number that was set when the company was half its size.

The labor estimate is not a bid document. It is the budget you will manage the job against every week until trim.

Electrical work absorbs a disproportionate share of design changes because it runs through every other trade's scope. Every relocated outlet, every added circuit, and every 'while you are here' from the superintendent is a change order or a T&M ticket, and it is only money if it is documented, priced, and approved. The foremen know this. They also have a building to wire.

The finance function's role is to make the recovery process easier than the alternative: a change order log per job with status, days outstanding, and dollar value, reviewed weekly; T&M tickets signed daily and priced by Friday; and pending change orders included in the cost-to-complete so the PM sees the margin at risk rather than the margin assumed. Where a general contractor's approval is slow, the log becomes the agenda for the next project meeting.

A change order log with 40 open items and an average age of 70 days is not a paperwork issue. It is a receivable that nobody has invoiced. We report the log's total value and age to the owner monthly, by job and by general contractor, because the customers who are slowest to approve changes are usually also the ones slowest to pay for them, and both facts belong in the next bid decision.

Public work carries its own accounting: certified payroll every week, prevailing wage classifications by craft and county, fringe benefit credits calculated correctly, and apprentice ratios documented. Get it wrong and the penalties are real, the payments are withheld, and the next bid gets harder. Get it right and public work is some of the most reliably paid revenue an electrical contractor can find.

We set up the payroll system and the job cost coding so that certified payroll is a report rather than a project, with wage determinations attached to each job, fringe credits reconciled to actual benefit costs, and the weekly submission produced by the same process that posts labor to the job. The burden rate on prevailing wage work is different from private work, and the estimate should reflect it.

Compliance also feeds the cash forecast, because a withheld progress payment on a public job usually traces to a missing form, and the form is easier to find on Monday than on the 25th. Public work also carries its own retainage and closeout rules, and the final payment can sit for months after substantial completion if the paperwork trail is incomplete. We track that trail from award, so the last check is not a surprise.

Your electrical supplier's credit line may be larger than your bank's, and it is faster to lose. Net 30 terms on $300,000 of monthly purchases is a $300,000 loan with no covenants and a credit manager who reads your payment history every morning. Stretch it and the price holds disappear, the gear order gets a deposit requirement, and the supplier files a preliminary notice on your best customer's project.

A 13-week cash forecast for an electrical contractor is built around this: supplier due dates by job against pay application receipt dates, retainage release timing, and the payroll that goes out regardless. It shows which weeks the line of credit carries the gap, which suppliers can be paid early for a discount, and which pay applications need a phone call. Joint check arrangements, where useful, are managed rather than endured.

Your own lien rights ride along. Preliminary notices, deadlines by state, and the decision to record are coordinated with your counsel and tracked in the same forecast, because a lien is a collections tool, and collections is cash. The supplier who is paid on the day promised, every time, is the supplier who holds a price for you when copper moves, and that is worth more than the discount you would have gotten by stretching.

An electrical contractor with a construction division and a service division needs two reporting structures under one balance sheet. Construction wants a WIP schedule, backlog with margin, phase-level labor variance, and change order exposure. Service wants ServiceTitan department metrics: technician utilization, average ticket, and DSO by customer type. The bank wants both reconciled to a general ledger that closes by the 10th business day.

We produce that package monthly and use it to run a project review with the PMs and a service review with the dispatch lead. The owner gets a one-page dashboard on top: cash, backlog margin, labor variance, change order aging, and supplier exposure. The surety gets the WIP and working capital calculations before the renewal request. The bank gets covenant calculations before the quarter ends.

Everything is documented so that a controller you hire in year two inherits a process, not a mystery. That is the difference between a consultant and a finance function. The package is also what makes the company sellable, bondable, and bankable on the same set of numbers, which is the goal of the whole exercise. One version of the truth, produced on schedule.