Why does winning your biggest job leave you short of cash?

Winning a job much larger than your usual work means carrying its costs for months before any of it comes back. That's the structure of the deal you agreed to rather than a bookkeeping failure, and the fix happens at the quote, where the cost of the float gets priced and the terms get decided while you still have the ability to say no.

What is the cash gap, exactly?

The number of days between the money leaving your account and the money arriving, multiplied by how much is leaving.

Say a fabrication shop wins a contract four times bigger than anything it has done. Materials are ordered in week one, on the supplier's 30-day terms. Payroll runs weekly from week two, because welders don't accept net 60. The job takes four months. The client pays 45 days after final delivery, assuming nothing gets queried. Add it up and the business is funding materials and wages for something close to six months before the first meaningful payment clears.

That's the cash gap, and the dangerous property of it is that it grows with success. A job twice the size doubles the amount at risk and often lengthens the terms too, because larger clients pay more slowly. You can be more profitable and more insolvent in the same quarter, and the P&L will look excellent the whole time, because profit and cash are different things and only one of them makes payroll.

The industry data says this is the normal condition rather than the exception. Average days sales outstanding in construction runs 83 days, against roughly 60 across all industries (CreditPulse 2025 benchmarks). 81% of subcontractors have supplier terms shorter than the time it takes them to get paid. 86% cover labour out of pocket while waiting, 75% cover materials, and one in three pull from personal or retirement savings to cover the gap (Billd, 2024 and 2025 National Subcontractor Market Reports).

Against that, the cushion most firms actually hold: the JPMorgan Chase Institute looked at the bank accounts of 597,000 U.S. small businesses and found the median firm holds a cash buffer covering about 27 days of typical outflows (JPMorgan Chase Institute, Cash is King: Flows, Balances, and Buffer Days, 2016). Twenty-seven days of cushion against an 83-day collection cycle. One large contract on slow terms outlasts the buffer of a median business several times over, and nobody mentions this in the congratulations.

What eighteen thousand chickens were actually for

I grew up on a farm in Manitoba with 18,000 laying hens. Eggs, not meat. That was the revenue, and it arrived the way eggs arrive, which is every single day, forever, whether anybody feels like it or not.

My dad also farmed about 900 acres. Medium to large at the time, not huge. He did it because the chickens were the same thing every day, day in and day out, and it drove him a bit crazy. The land was seasonal and slower and it asked something different of him, and I suspect it spoke to his soul in a way the barn never did.

It took me years to understand what the arrangement actually was.

The 900 acres is a gamble with a twelve-month settlement period. Everything goes into the ground in spring and nothing comes back until fall, and in between you are carrying seed, fuel, fertiliser and equipment on money you don't have yet. The weather decides the rest. I remember 10 centimetres of snow on the tenth of June, on crops that were already up: six inches of beautiful uniform green under snow, and that's just how it goes. This year the spring was so wet it was a struggle to get on the fields at all, and the crops that did get in never had to send their roots down looking for moisture, so when the rain stopped later they had nothing deep to draw on and they shrivelled. Easy conditions early, shallow roots, no reserves for the dry part. Then price it all as a commodity that moves on politics happening on another continent. Every ancient culture sacrificed to a god of rain and a god of sun, and having watched men stand in a yard looking at the sky, I understand the impulse completely.

There were years I worked on that farm for a wage and my dad would say, well Thom, I just worked out what I made this year, and I worked for nothing. He'd be smiling when he said it. Good crop years were wonderful. Bad ones were depressing.

They were not, however, going to bankrupt us. That's the whole point, and it's the eggs.

A crops-only operation with no livestock is a genuinely risky business, because the entire year's cash arrives in one lump after the entire year's cost has already gone out. Add the hens and the arithmetic changes completely. Something monotonous paid every week, which meant the gamble could be carried, and a bad harvest was a bad year rather than the end of the farm.

So ask the uncomfortable version of that about your own business. When you take the biggest contract of your life, what's paying the bills between now and the day it settles? If the answer is that contract, you don't have a farm with hens on it. You've bet the whole operation on the weather.

It's worst there because materials get paid for before labour and labour gets paid before anyone invoices. But the shape is identical anywhere a service business lands an enterprise client.

56% of U.S. small businesses currently have outstanding unpaid invoices, owed an average of $17,500 each, and 47% have invoices more than 30 days overdue (Intuit QuickBooks, 2025 Small Business Late Payments Report, n=2,487). An agency that wins a large retainer with net-60 terms is running the same structure as the fabrication shop: staff paid biweekly, contractors paid on delivery, client paying two months after the invoice that goes out after the month of work. That's a 90-day funding requirement on a contract everyone celebrated.

The consultancy version is quieter and worse, because there's no material cost to make it visible. The money simply doesn't arrive, and it keeps not arriving while the work is delivered flawlessly.

What does it look like when a large client does this on purpose?

The clearest public example is Carillion, the UK construction and services group that went into liquidation in January 2018 owing suppliers a sum most of them never saw again.

Carillion had signed the UK government's Prompt Payment Code, which asks signatories to pay inside 60 days. Its actual standard supplier terms were 120 days. It also ran a supply chain finance scheme under which a supplier could get paid at around 45 days by selling the invoice to Carillion's bank at a discount, while Carillion itself didn't have to settle with the bank until the 120 days had run (UK Parliament research briefing, The collapse of Carillion). The parliamentary inquiry into the collapse described the company's use of the scheme and its treatment of the supply chain in blunt terms (Business, Energy and Industrial Strategy and Work and Pensions Committees, Carillion, 2018).

Read it as an arithmetic problem rather than a scandal. Thousands of suppliers agreed to finance a customer for four months, at a discount if they wanted the money sooner, because the contract was large and they wanted it. Each of those suppliers had a healthy-looking order book. When the customer failed, the order book turned out to be a list of money they had already spent.

The terms were the deal. The work was just the part everyone talked about.

Where was this job actually lost?

In the quote, or before it. The delivery had almost nothing to do with it.

The instinct when a large opportunity appears is to price the work, add margin, and win. What almost nobody prices is the float, which is a real cost with a real number attached to it. If you're carrying $250,000 for four months, that money has a price whether you borrow it or fund it from your own reserves, and if you fund it yourself the cost is everything else that money could have done, including surviving a slow month.

Two consequences follow, and the second one is the reframe.

The first is that the float belongs in the quote. Interest, factoring cost, or your own opportunity cost, calculated and added, the same way you'd add fuel or insurance. A job that only works if you're paid promptly is a job you've mispriced.

The second is larger. Payment terms are qualification criteria. Which clients' terms you're willing to accept is a decision about who you serve, made at the top of the funnel, and it belongs beside every other thing you've decided about your ideal client. A business that takes any terms from anyone has no qualification standard, and that shows up as a cash crisis five months later wearing a costume that says "growth."

This is where it stops being a finance question and becomes a positioning question. Saying no to net-90 requires the same thing as holding any other term: enough demand that losing this one doesn't end you. A firm that can't refuse a payment schedule will eventually accept one that breaks it, and it will happen on the biggest job it has ever won, because that's the job with the longest terms.

The data even shows firms doing this deliberately. 56% of contractors report turning down projects because of cash flow risk (Mobilization Funding, 2025). That's a refusal, priced and used. It's the same muscle as declining a client type or holding a deposit policy.

Who decided you get paid at the end?

Nobody. It's a habit your industry has, and most owners have never noticed that it's a habit rather than a rule.

At a gas station you pay before you get the fuel, and the whole transaction is over in four minutes so nobody thinks about it. In construction you take a deposit if you're lucky and then draw against progress, floating a good deal of the work yourself. In coaching and consulting you're paid in advance as a matter of course, and nobody blinks. Three completely different conventions, none of them written into law, all of them absorbed by the people inside them as simply the way this works.

That matters most when someone crosses from one industry into another, which happens constantly and quietly. A general contractor who starts a marketing business brings the construction convention with him, because it's the only one he's ever been paid under. Now he's floating creative work the way he floated a build, and he's doing it in a category where his own suppliers expect to be paid this month and where prepayment would raise nobody's eyebrows. Nothing about the new business required that. He imported it.

I run into this constantly with newer marketers, coaches and consultants. They struggle to ask for money before the work, and they struggle even more to explain why they're asking. The explanation is not complicated and it does need to exist in the contract rather than in your head.

For what it's worth, mine. Standard engagement is 50% to start and 50% once the client is happy. On projects, which behave differently from retainers, the payments get staged: signature, then a deposit before anything that costs me money out of pocket, then a milestone or two, and the final payment never comes until they're satisfied. If I'm travelling to run a workshop, I want 10% before I get on the plane, because the flight is a real cash outflow and it happens weeks before any of the work does.

That's the underlying rule, and it's more useful than any particular percentage: tie each payment to your own outflows rather than to the calendar. Money that leaves your account before delivery gets covered before delivery. Money that represents your profit can wait until the client is happy, and probably should, because that's the part that keeps you honest.

I'm also not the strictest person in this business, and I'd rather show you the range than pretend there's one right answer. My onboarding coach when I went through StoryBrand certification took the full amount, over the phone, card number read out, at the moment the work was verbally booked and before anything began. It worked for him. I've never been comfortable doing it. Going the other direction, I've had clients with genuinely lumpy cash flow pay off a $5,000 website at $500 a month for ten months, and that was the right call for that client and it cost me nothing I couldn't carry.

What I don't do is decide any of that in the middle of a job.

What do you do if you're standing in it right now?

Assuming the job is already signed and the gap is already open, in order:

1. Build the actual calendar. Every outflow by week, every expected inflow by week, for the life of the job. Not a monthly total. Weekly, because payroll is weekly and that's where it breaks.
2. Find the deepest point and the date. One number, one date. That's your requirement, and until you've written it down you're managing a feeling.
3. Arrange the money before you need it. A line of credit costs far less when you don't need it yet. Rates on emergency financing are set by how obvious your position is.
4. Renegotiate the schedule, not the price. Progress billing, mobilisation deposits, monthly draws, milestone payments. Most clients will move on timing more readily than on the total, because timing costs them less than a discount does.
5. Invoice the day the milestone is done. Not at month end. The clock only starts when the invoice lands, and a week of internal delay is a week of your money.
6. Say the number out loud to the client if it comes to it. Reasonable clients would rather adjust the draw schedule than have their contractor fail mid-project. Unreasonable ones tell you something useful about the next contract.

Putting it to work

Before you quote the next job that's meaningfully bigger than your usual, do these four things.

Calculate your current cash buffer in days. Total cash available, divided by average weekly outflow, times seven. That's how many days you can survive with nothing coming in. Most owners guess high by a factor of two.

Model the float on the job in front of you. Weekly outflows against expected inflows, the deepest point, the date it happens. If that number is larger than your buffer, you are not funding this job. Somebody else is, and you need to know who before you sign.

Price the float into the quote. Cost of the money for the number of months you'll be carrying it, added as a line you understand even if the client never sees it broken out.

Decide your terms floor in advance. The longest payment terms you'll accept, the deposit you require, the draw schedule you need on anything over a certain size. Write it down now, while nothing is at stake, because you will not make this decision well with a large contract sitting in front of you.

Tie each payment to an outflow of your own. List what leaves your account before delivery: travel, materials, subcontractors, the first month of payroll on the job. Every one of those gets covered by a payment that lands before it does. What's left is your profit, and that can wait until the client is happy.

Name your egg money. Write down what pays the bills while the big job is in the ground. If the honest answer is that the big job pays them, the terms on it aren't a preference any more. They're the whole business.

Then hold it once. The first time you decline terms you can't fund, you'll find out whether you have a business or a queue.

Sources

• Construction Payment Statistics 2026: Slow Pay, Lien Filings, and Cash Flow, DocJoist, March 2026 — compiling CreditPulse 2025 DSO benchmarks, Billd 2024/2025 National Subcontractor Market Reports, and Mobilization Funding 2025
• Cash is King: Flows, Balances, and Buffer Days, JPMorgan Chase Institute, 2016 (data from 597,000 small businesses)
• 2025 US Small Business Late Payments Report, Intuit QuickBooks
• The collapse of Carillion, UK Parliament research briefing CBP-8206
• Carillion, House of Commons BEIS and Work and Pensions Committees, 2018

Frequently asked

How do I calculate my cash gap?

Lay out every cash outflow for the job week by week, then every expected inflow week by week, then run a running balance. The lowest point of that balance is the amount you have to fund, and the date it happens is when you need it. Do it weekly rather than monthly, because a monthly view hides the payroll runs that actually break businesses.

Should I take a big job I can't fund?

Not on the assumption that it'll work out. Either restructure the terms so the client funds more of it through deposits and progress draws, arrange financing before you start, or decline. A job that fails halfway through costs more than the job you didn't take, in money and in reputation.

What payment terms should I be asking for?

Something that keeps your inflows ahead of your outflows: a deposit before mobilisation, progress payments tied to milestones you can evidence, and a final balance that's small enough that a dispute over it can't sink you. The specifics vary by trade and by contract size. The principle doesn't.

Isn't asking for money up front going to cost me the job?

Less often than you think, and the fear usually comes from a convention you absorbed somewhere else. In consulting and coaching, payment in advance is completely normal and nobody objects. In construction it isn't, and asking for a mobilisation deposit is still reasonable. Work out what's actually standard in the category you're in now rather than the one you came from, put it in the contract, and be able to explain in one sentence what the payment covers.

Is invoice factoring or a line of credit worth it?

Both are legitimate tools and both cost money, which is fine as long as you priced it into the job. What causes damage is arranging either one in a panic, because the terms available to a business in trouble are set accordingly. Get the facility approved before the deepest point of the gap, not during it.

Does this apply to service businesses without materials costs?

Yes, and it tends to be less visible. Payroll is your material. If you're carrying a team for 60 to 90 days waiting on an enterprise client's accounts payable process, you're financing that client exactly the same way, minus the warning sign of a supplier invoice.

Ready to look at the architecture honestly?

If growth keeps arriving as a cash squeeze, the constraint isn't your accountant. Book the conversation and we'll look at where your terms, your qualification standards and your positioning are quietly deciding which jobs you can afford to win. Or read about how we work first.

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