You commit to an asphalt price months before you buy it
Every tender you sign is a forward sale: the price is fixed at closing, the hot-mix gets bought across a paving window that may open ninety days later, and liquid asphalt cement moves with oil in between. Ontario's Ministry of Transportation publishes a monthly asphalt cement price index for exactly this reason, and provincial contracts can carry a price adjustment tied to it. Many municipal tenders and almost all commercial contracts carry no such clause, so the exposure sits inside your margin.
The CFO version of this problem is unglamorous and effective. Know the asphalt-cement exposure on every open bid, refresh plant quotes while bids sit unawarded, push for the adjustment clause wherever the owner offers one, price the risk explicitly where they do not, and decline the tender where neither works. A job won by absorbing oil risk for free was not won; it was borrowed.
The estimator's unit rates need a feedback loop
Most paving companies bid from unit rates that were right once. The fix is a closed loop: each finished job's actual costs, which the per-tonne books inside End-to-End Accounting already capture, get compared line by line against the estimate that won it, and the differences flow back into the rates before the next tender closes. Run monthly, the same review shows win rate by work type, so you can see whether you are winning plaza lots on skill or municipal programs on optimism.
Alongside it sits a backlog margin report: the work you have already sold, revalued at current plant prices rather than bid-day prices. A bad spring on oil should show up in that report in June, while schedules and change orders can still respond, not as a surprise in the year-end file.
| Bid line | How it drifts after award | The check we run |
|---|---|---|
| Hot-mix asphalt | Plant price moves between closing and the paving window | Asphalt-cement exposure and refreshed quotes on every open bid |
| Trucking | Haul distance and plant wait times exceed the assumption | Actual haul cost per tonne, by plant and by site |
| Crew and traffic control | Night work and lane-closure setups outgrow the allowance | Labour and traffic-control hours per tonne against estimate |
| Equipment time | Machine-days on site exceed the days the rate charged for | Machine-days billed to jobs against machine-days owned |
| Overhead and margin | Winter carrying costs never made it into the rate | Overhead recovery reset each spring before the first bid |
The paver earns nothing on the float
A paving spread makes money only while asphalt is going through it. Every move between jobs costs the float truck, the driver, the setup and the laying hours lost on both sides, and the financing payment runs whether the machine laid eight hundred tonnes that week or sat in the yard. So we track a short list of utilization numbers, tonnes per paving day, paving days per machine per season, float moves per month, and schedule work in geographic clusters so the float runs less and the screed runs more.
The same numbers settle the ownership questions this trade argues about endlessly: whether the milling machine you rent eleven times a season should be owned, whether a second spread adds profit or just splits the same tonnage across twice the iron, and when the oldest roller's repair bills finally beat a payment. When the answer is buy, the lender file decides the terms, and Walla's years in commercial banking shape how Business Financing Advisory builds it.
Winter is a cash problem with a known shape
The paving winter is predictable: revenue stops in November, while loan payments, insurance, yard rent and instalments do not, and spring spends money for weeks before it collects any. Predictable problems deserve a schedule, so we run a rolling thirteen-week cash forecast from the last lift to the first, with holdback releases and scheduled receipts on one side and every fixed commitment on the other. The operating line gets sized and renewed in the fall, when the statements show a full season, instead of negotiated in February from a position of need.
That forecast, the utilization scorecard and the bid-book review form the standing agenda of a monthly Fractional CFO engagement, sized and priced for owner-managed paving and sealing companies across Mississauga and the GTA. You do not need a finance hire. You need the questions asked every month, while the answers can still change the season.
