Glossary term
Contractor cash flow
Also called: service contractor cash flow
Short definition
Contractor cash flow is the timing difference between paying labor, parts, and vendors and collecting customer revenue—managed through deposits, progress billing, WIP discipline, and DSO controls.
Related terms
Expanded explanation
Full definition and contextExpand
Cash flow pain in trades and service often comes from “profitable on paper” jobs that strangle liquidity: long AR cycles, inventory growth, and unbilled work sitting in ambiguous states.
Operational fixes include milestone billing on large installs, tighter invoice readiness at job completion, and honest WIP reviews weekly—not only month-end.
Recurring programs can stabilize cash, but only when PM execution and renewals are measurable; otherwise deferred work becomes silent debt.
Industry relevance
Most useful for growing commercial contractors balancing material-heavy jobs with service contract portfolios.
Industry tags: field service general, hvac, electrical, plumbing