Construction Industry
CFO Services for Subcontractors
Cash flow timing, retainage management, and profitability analysis for electrical, plumbing, HVAC, and specialty trade contractors.
Do you understand trade-specific challenges?
Yes, we work with electrical, plumbing, HVAC, mechanical, concrete, steel, and other specialty contractors. We understand the unique financial challenges of trade work—labor burden, retainage, pay application cycles, bonding, and the relationship-driven nature of getting work. Our team has specific experience with the subcontractor segment of construction.
Financial Leadership Built for Subcontractors
Subcontractors face unique financial challenges that general contractors and other businesses never encounter. You're dependent on payment timing that's out of your control, with retainage that can tie up 10% of your revenue for months. Your labor costs are your biggest expense, but calculating true labor burden—including taxes, insurance, benefits, and downtime—is surprisingly complex. And you're constantly balancing the need to grow with the cash flow reality of financing larger projects.
At 1CFO, we specialize in helping specialty trade contractors—electrical, plumbing, HVAC, mechanical, concrete, steel, and other trades—build profitable, sustainable businesses. We understand that subcontractors operate in a financial environment unlike any other: you need to bid competitively while covering costs that GCs don't see, you're financing projects while waiting for pay applications to clear, and you're managing labor that represents both your biggest expense and your competitive advantage.
Our fractional CFO services give subcontractors access to the financial expertise typically reserved for much larger construction companies. We help you understand your true job costs, optimize your bidding strategy, manage the cash flow challenges of retainage and slow-paying GCs, and build the financial foundation for sustainable growth.
Ready to Transform Your Finances?
Get a free consultation with a CFO who specializes in subcontractors.
Serving businesses from $2M to $50M+
How We Help Subcontractors
Our specialized CFO services address the unique financial challenges of your industry.
Cash Flow Timing
Navigate the complex payment timing of construction—understanding pay application cycles, forecasting retainage releases, and managing the working capital gap between labor costs and GC payments.
Retainage Tracking
Track retainage across dozens of active projects, forecast release timing based on project status, and manage the cash flow impact of retainage on your working capital needs.
True Labor Burden
Calculate your actual cost per labor hour including all burden factors—payroll taxes, workers comp, benefits, PTO, training, and non-billable time. Know your real costs to bid profitably.
Job Cost Analysis
Track profitability by job, by trade, by customer, and by PM. Identify which work makes money and which doesn't, so you can pursue the right opportunities and bid smarter.
Equipment Economics
Make smart decisions about equipment—when to buy vs. rent, how to calculate true ownership costs, and how to optimize utilization. Equipment is often your second-largest expense after labor.
Bonding Support
Build the financial profile that supports your bonding capacity. We prepare the financial packages sureties need and help you communicate effectively with your bonding agent.
The Subcontractors Financial Landscape
The subcontractor ecosystem operates by financial rules that differ dramatically from both general contractors and other industries. Subcontractors are typically paid 30-60 days after invoice submission through pay applications, with 5-10% retained until project completion or even later. This creates a permanent working capital gap that must be financed—often with personal guarantees that put owners' assets at risk.
Labor economics dominate subcontractor financials in ways that require sophisticated management. True labor burden typically runs 25-40% above base wages when accounting for payroll taxes, workers' compensation insurance, benefits, paid time off, training, and non-billable hours. Companies that don't calculate this accurately underbid and erode profitability without understanding why.
The bonding and banking requirements for growth-oriented subcontractors create additional financial complexity. Surety companies require detailed job costing, work-in-progress schedules, and demonstrated financial discipline. Banks want to see backlog quality and aging receivables. Growing subcontractors need financial management that satisfies these stakeholders while maintaining the operational focus that wins work.
Why Work with a Subcontractors Financial Specialist?
Subcontractor financial management requires specific expertise that generic CFOs and bookkeepers lack. Percentage-of-completion accounting, retainage tracking, union labor reporting, certified payroll compliance, and job cost analysis all require specialized knowledge. A CFO who doesn't understand construction will struggle to provide meaningful guidance.
Our team has deep experience with the specialty contractor segment of construction. We understand the dynamics of trade work—the seasonality, the labor challenges, the relationship-dependent nature of getting work, and the thin margins that require precision job costing. We speak the language of the trades and understand the metrics that matter: labor burden recovery, equipment utilization, bid-to-win ratios, and backlog quality.
We also understand the practical realities of subcontractor life. Many subcontractors have grown from one truck and a dream to multi-million dollar operations without ever having sophisticated financial management. We meet you where you are—whether that means cleaning up years of messy books or refining an already-solid financial operation. We're not here to judge how you got here; we're here to help you get where you want to go.
Subcontractors Financial Challenges We Solve
Common pain points we help eliminate for subcontractors businesses.
Payment Timing
GCs often pay 45-60 days after your pay application, but labor expects their check every week. Managing this timing gap is the central challenge of subcontractor cash flow.
Labor Burden Recovery
If your bids don't fully recover labor burden, you're losing money on every hour worked—even if jobs look profitable on the surface.
Project Selection
Bidding the wrong jobs—or bidding the right jobs at the wrong price—erodes profitability. Understanding your costs is essential to bidding strategy.
Growth Financing
Growing backlog requires growing working capital. Many profitable subcontractors struggle to grow because they can't finance larger projects.
Union Complexity
Union shops face additional layers of financial complexity: multiple benefit funds, complex fringe calculations, and detailed reporting requirements.
Retainage Float
With 5-10% of billings held back for months, retainage represents significant capital that must be financed until release.
Frequently Asked Questions
Recommended Services
Ready to Transform Your Subcontractors Finances?
Schedule a free consultation to discuss your specific challenges and learn how our CFO services can help your subcontractors business thrive.