The 7 Hidden Cash Leaks in Contractors' Bookkeeping

 Contractors lose thousands each year due to hidden problems in their books. Here are the 7 most
 common leaks I find when I run a Books Stress Test for construction business owners.
 • 1. Job Costs Mis-Coded – Labor and materials often get dumped into 'miscellaneous' or
 overhead instead of being tied to the right job. This hides true job profitability and makes bids
 inaccurate.
 • 2. Unbilled Change Orders – Extra work gets approved in the field but never makes it onto an
 invoice. Contractors eat the cost and profits vanish.
 • 3. Duplicate Vendor Payments – Without proper AP controls, vendors get paid twice for the same
 invoice. This is one of the fastest ways cash leaks out.
 • 4. Aging Accounts Receivable – Invoices sit 60+ days unpaid. Contractors essentially finance
 their clients’ projects while payroll still drains cash weekly.
 • 5. Payroll Not Allocated to Jobs – Field labor often goes straight to 'payroll expense' instead of
 job costing. This makes some jobs look more profitable than they are.
 • 6. Missing Retainage Tracking – Retainage withheld by GCs/owners doesn’t get tracked
 separately, so contractors think they have more cash coming than is realistic.
 • 7. Poor Cash Flow Forecasting – Contractors know what’s in the bank but not what’s coming
 in/out over the next 30 days. Surprise tax payments, supplier bills, or payroll crush their cash
 position.
 These 7 leaks are exactly what I look for in a free 30-minute Books Stress Test. Finding and fixing just
 one of these can save contractors $1,000–$5,000 per month. Want me to run one for you? Let’s
 connect