Mastering Cash Flow: Tips for Restoration Contractors

Cash flow problems are one of the biggest threats to restoration businesses—especially those that rely on insurance work, operate on tight margins, and juggle large teams across multiple jobs. You can be profitable on paper and still not have the cash to make payroll, pay vendors, or invest in growth.

In this post, we’ll cover practical strategies to help restoration contractors maintain positive cash flow—starting with the basics and moving into tactics that are specific to the restoration industry.

1. Bill Faster—Get Paid Sooner

One of the simplest (and most overlooked) ways to improve cash flow is to invoice more frequently and without delay. In a business where payments often rely on insurance companies or third-party administrators (TPAs), the clock doesn’t start ticking until your invoice is submitted.

Tips to speed up invoicing:

• Send partial invoices at project milestones when possible

• Create a standard invoice process and assign clear accountability

• Use job management software that integrates with your accounting system

• Avoid long delays between job completion and invoice creation

2. Track Payments Daily

If you’re not checking accounts receivable weekly—or even daily—you’re probably leaving money on the table. Restoration contractors often deal with high volumes of small payments and long payout windows, especially for insurance claims.

What to implement:

• A system for flagging late payments early

• A process for following up (calls, emails, or escalations)

• Visibility into what’s outstanding by job, adjuster, or carrier

Even a few days of delay across multiple jobs can create major cash crunches.

3. Match Labor and Material Spending to Job Cash Flow

You shouldn’t have to fund the insurance company’s delays out of your own pocket. Try to time your major job costs—especially large subcontractor bills and material purchases—with the timing of your expected receivables.

Strategies include:

• Negotiating better terms with vendors and subs

• Holding back final subcontractor payments until final payment is received

• Forecasting cash by job to understand where you might hit bottlenecks

4. Know Your Breakeven—and Watch It Weekly

Cash flow can suffer when jobs that look profitable don’t actually cover overhead. If your pricing isn’t consistent, your production fluctuates, or your overhead costs are growing faster than revenue, you might have a breakeven problem.

Make sure you:

• Calculate your breakeven weekly or monthly

• Know your true burdened labor cost

• Include non-job costs like rent, admin wages, and vehicles

Having a clear picture of your breakeven can help you avoid underbidding and prepare for slower months.

5. Build a Cash Buffer

Cash reserves give you breathing room. Without them, one slow payment cycle can create chaos. While it takes time to build reserves, start by setting simple targets like “one payroll in savings” or “one month of fixed overhead.”

To build a buffer:

• Set a percentage of every job payout aside in a separate account

• Treat it like a non-negotiable expense

• Use budgeting tools to set and track savings goals

6. Use Financial Reports That Actually Help You

Don’t rely on your P&L alone. Use cash flow statements, AR aging summaries, job profitability reports, and forecast tools. These give you the ability to look ahead—not just react to what already happened.

If your bookkeeper isn’t giving you this level of insight, it’s time for a CFO-level view.

Ready to Improve Your Cash Flow?

Kiwi Cash Flow delivers custom monthly reports, clear KPIs, and financial forecasting—so you always know where the money is going and what to expect next.

👉 Want to stop worrying about cash flow? Schedule a call today.