Growth eats cash before it pays
A GC can grow itself into insolvency while profitable on paper, and the mechanism is simple: payroll goes out weekly and subs invoice monthly, while draws arrive on certification and 10% of every one of them sits in holdback until the lien period clears. Each new job widens that gap, which is why the constraint on a growing contractor is almost never sales. It is working capital and the size of the bond program, and both are numbers a CFO manages deliberately.
That is the shape of a Fractional CFO engagement for a contractor: senior finance work at contractor scale, priced in writing, no full-time hire.
Thirteen weeks of the draw cycle, in advance
The working tool is a rolling 13-week cash forecast built from the jobs themselves: certified draws and their expected payment dates, the holdback release schedule by project, sub and supplier payment runs, weekly payroll with its remittances, HST cycles and equipment payments. It answers the questions that actually keep contractors up at night: whether the second crew is affordable before the Phase 2 draw lands, and which week the line of credit peaks.
The forecast also disciplines billing, the cheapest financing a GC has. Mobilization and general conditions billed where they genuinely belong in the schedule of values, draws submitted the day they are certifiable, change orders priced and approved before the work, deposits taken where the contract allows. When the gap still needs bank money, Business Financing Advisory sizes and negotiates the facility, and it helps that Walla Assaf spent years on the lending side before founding Tauro.
The surety file: what a bond desk actually reads
Bonding capacity is priced off your statements: working capital, the equity left in the company, and whether the WIP schedule reads like it comes from a contractor who knows their jobs. Sureties and lenders usually specify the level of CPA involvement they want behind those statements:
| Question | Compilation | Review |
|---|---|---|
| What the CPA does | Compiles management's figures into statements; no assurance expressed | Analysis and inquiry supporting limited assurance that the statements are plausible |
| Where it usually fits | Smaller bond lines and lender comfort at modest limits | The norm as the bond program and credit facilities grow |
| What drives its quality | Clean monthly books and a current WIP | The same, plus support for estimates and cut-off |
We prepare surety packages the way underwriters read them: retained earnings history, WIP with any fade explained, holdbacks aging, and where the desk requires it, a compilation or review engagement standing behind the numbers. Growing a bond line is mostly a two-to-three-year project of leaving equity in and reporting it credibly, and we manage it like one.
Subs are counterparty risk, not just cost
A GC's biggest unpriced risk is often a subcontractor's failure, and the finance function owns part of the defence. WSIB clearance certificates come first: without a valid clearance, the principal can be held liable for a contractor's unpaid premiums, so no sub starts, and no sub gets paid, without a current clearance on file through WSIB's free online service. Certificates of insurance sit beside them, tracked to expiry rather than filed and forgotten.
Payment discipline is the other half: paying subs against certified progress rather than invoices on faith, retaining the holdback the Construction Act requires, and watching for the signs of a sub in trouble, priced-to-lose bids, supplier calls, requests for advances. A sub that fails mid-job costs multiples of its contract.
Margin you can steer: overhead, iron and the bid decision
Job-level gross margin flatters every contractor until overhead is charged to the jobs that consume it. We build an overhead recovery rate into job reporting and give owned equipment an internal charge-out rate, so a machine-heavy job stops looking cheaper than it is and idle iron shows up as the cost it has become. Rent-versus-buy decisions then run on utilization numbers instead of instinct.
The same numbers make bidding honest. Which job types, sizes and owners actually produced margin last year is a knowable fact, and it should decide what you chase this year. A quarterly sit-down over per-job results, the forecast, the bond position and the pipeline is where those calls get made, with a CPA who has sat on the credit side of the table. Filing what happened is table stakes; the CFO work is deciding what happens next.
