Cash flow forecasting for small contractors: the 13-week method

Plenty of busy, profitable contractors still have weeks where payroll is due and the account is thin. The reason is timing: you pay for labor, materials and subs before the customer pays you, and the gap grows with every job you add. A 13-week cash flow forecast shows that gap before you are standing in it.

What the forecast is

It is a spreadsheet with one column per week for the next 13 weeks. Each column lists the money you realistically expect in and the money that has to go out, and ends with a projected bank balance. It is not your bid, your profit and loss statement or your tax return. It only answers one question: will there be enough cash each week?

Step 1: Start with real cash

Put today's bank balance in week zero. Use the balance in the account, not what you are owed.

Step 2: Money in, job by job

Go through every signed job and list each payment from its payment schedule:

• Deposit, in the week you expect it to clear.
• Progress payments or draws, in the week after the milestone that triggers them. If a draw depends on a passed inspection or a lender's site visit, allow for scheduling time.
• Final payment, after the punch list and final inspection, not on the day you think you will be done. Final payments are the ones most likely to slip.
• Change orders, only once they are signed. See how to write a change order.

Use the week you will actually be paid. If a builder or property manager you work for always pays a couple of weeks late, forecast it late. Leave unsigned bids out of the main forecast.

Step 3: Money out

• Payroll and payroll taxes, on your real pay dates
• Subcontractor payments, on the terms in each subcontract
• Supplier accounts, on their billing terms, plus anything you pay at the counter
• Equipment rentals, dump fees, fuel and vehicle payments
• Insurance premiums, including workers' comp if you have employees
• Loan and credit card payments, rent, phone and software
• Estimated tax payments and your own pay

Step 4: Calendar the Oregon costs that sneak up

• CCB license renewal. The CCB lists renewal at $400 every two years on its contractor tools page. Put it in the forecast the quarter before it is due. See the renewal checklist.
• Bond and liability insurance renewals. Your license depends on both staying current; see the bond and insurance table.
• Permit fees and plan-review fees that you front for the customer. Check the fee schedule for each building department.
• Slow-season weeks. If rain, snow or the holidays usually slow your work, use your own past records to forecast fewer jobs in those weeks, not a guess.

Step 5: Set a floor and flag red weeks

Decide the lowest balance you are willing to hold, for example one payroll plus the next supplier bill. Format the sheet so any week that ends below that floor turns red. Each red week is a decision you get to make early instead of late.

Step 6: Update it every week

Pick a fixed time, such as Friday afternoon. Replace last week's forecast with what actually happened, roll the forecast forward one week and re-check the red weeks. Update job timing at the same time; when a job slips, its draws slip too. After a few weeks you will see whether your estimates run optimistic.

How contractors close a cash gap

• Invoice the day a milestone is done, with photos, and follow up before the due date. See contractor invoicing and late payments.
• Fix the payment schedule at the bid stage. Tie draws to milestones you control and avoid large stretches of work with no payment. Price the job with the bid calculator and the method in how to price a remodel bid.
• Get every change order signed before the work, and bill it with the next draw.
• Line up supplier and sub terms so big outflows land after the draws that pay for them, where the agreements allow it.
• Keep your contract paperwork right. The CCB says that if you do not provide a required written contract and consumer notices, you may not be able to claim a lien. See Oregon residential contract requirements.
• Talk to your bank or accountant early if a gap looks unavoidable. A forecast gives them something concrete to look at.

Sources: CCB contractor tools (license fees, written contract and lien points), checked Oct 18, 2026.