A contract win is a loan you make to your client
The cash mechanics of a new site are unforgiving and completely predictable. Guards are recruited and verified before mobilization, uniforms and equipment are bought up front, the first pay run leaves two weeks after the first shift, and the client is invoiced monthly in arrears on terms that often run to net 45. Until the first payment lands, every dollar of that site is financed by you, and HST on the first invoice comes due for the period it was issued regardless. Modeled as a timeline, one site looks like this:
| Weeks after mobilization | Cash position of the new site |
|---|---|
| Week 0 | Uniforms, equipment and onboarding paid; no revenue |
| Week 2 | First payroll out |
| Week 4 | Second payroll out; first monthly invoice finally issued |
| Weeks 6 and 8 | Third and fourth payrolls out while the invoice ages |
| Weeks 10 to 11 | First payment arrives, if the client pays on time |
Multiply that by two or three wins in a quarter and a healthy company can miss payroll. The CFO work is knowing the size of the gap before you bid, not discovering it at week six.
Bids priced on loaded cost, not the pay rate
The spread between bill rate and pay rate looks like margin until the burden is loaded in: vacation pay, the employer share of CPP and EI, WSIB premiums, Employer Health Tax, stat-holiday premiums for sites that never close, unbillable training and supervision hours, and the open posts covered at overtime. A bid priced off the raw pay rate wins easily and loses money slowly. We maintain a bid model that carries the full loaded cost per post, so the price defends itself.
Continuous posts hide their true headcount. A 24/7 site is a 168-hour week, which is 4.2 full-time guards before anyone takes vacation, gets sick or quits, so a realistic bid carries closer to five heads per post once coverage is priced in. A bid built on 4.2 runs every absence through the overtime line instead, and the margin that looked comfortable at signing erodes one open shift at a time. We make the coverage factor an explicit line in the model rather than a discovery in month three.
Ontario raises the minimum wage every October 1, and a large share of guard wages moves with it. A multi-year contract without wage escalation language donates each increase to the client, so we put the pass-through math on the table at bid time, when it can still be negotiated.
Concentration, collections and the anchor client
A handful of property management firms often control most of a guard company's sites, which concentrates both revenue and payment behaviour: one anchor client drifting from 45 to 60 days can be the difference between a calm month and a bridge loan. The CFO rhythm keeps aged receivables reviewed weekly, invoices out on schedule, mobilization fees or deposits negotiated where the market allows, and a stop-service threshold written into the master agreement rather than improvised during a dispute.
Invoice timing is part of collections too. Condominium corporations and managed properties often approve payables on a monthly cycle, so an invoice that misses the cut-off waits for the next meeting and ages 30 days without any dispute existing. We map each anchor client's approval calendar and portal requirements, get invoices in ahead of the cut-off with the backup their process demands, and treat a missed cycle as an operations failure to fix, not a receivable to chase.
Financing sized to the pay cycle
The structural gap between biweekly payroll and 45-day receivables is exactly what an operating line exists to carry, and the facility should be sized to the portfolio plus the next win, not to last year's average balance. Walla Assaf, CPA came to public practice from banking and corporate finance, so the lender conversation is prepared the way the lender will read it: margin by contract, aged receivables and a rolling cash forecast. Business Financing Advisory structures the request, and where a lender wants CPA-prepared statements, a Compilation Engagement delivers them.
What the monthly CFO rhythm covers
As a Fractional CFO, we run a 13-week rolling cash forecast that shows every pay run and expected receipt, review contract margin so renewals and re-pricing are evidence-based, keep the bid model current with each October's wage math, and prepare whatever the bank needs before it asks. For guard companies across the GTA that means growth decisions get made with the cash gap already counted. Scope and fee are set out in writing after a free 15-minute discovery call.
