When cash gets tight, most contractors react the same way: sell more jobs. But sales are just one part of the equation. There are three levers you can pull to improve cash flow — and most businesses ignore the other two.

Here they are:

1. Accounts Receivable (Get paid faster)
   Speed up invoicing. Enforce payment terms. Offer early pay discounts. Send reminders. Cash stuck in receivables is useless.
2. Inventory & Job Costs (Spend less upfront)
   Buy materials just-in-time. Negotiate supplier terms. Reduce waste. Don’t over-purchase because “we might need it later.”
3. Accounts Payable (Delay what you owe — smartly)
   Stretch payment terms when possible. Pay bills strategically. Don’t pay everything early just to “be done with it.”

When you treat cash flow like a system instead of a mystery, you gain control — not just survival.

One contractor was doing $100K/month in sales but had less than $5K in his account at any given time. He didn’t have a sales problem — he had a cash conversion problem. We mapped out the 3 levers and discovered that his receivables were aging past 45 days and he was pre-paying for too much material upfront. We adjusted billing cycles, shifted material orders closer to install dates, and negotiated Net 30 with two key suppliers. His cash balance went from $4,800 to $39,200 in just 60 days — without increasing sales.

Want to pull the right levers in your business?

Pick up your free copy of my new book, “The 7 Minute Conversation-How to Hear the Story Your Small Business Financial Statements Are Telling You-CONTRACTOR EDITION”.  Go to www.7MinuteConversationBook.com

Ready to find out where your cash and profits are really going? Book your free 15-minute Profit and Cash Flow Call with me. No pressure. Just real clarity. I’ll help you see where your money’s hiding — and what to do about it. Schedule at www.CashFlowCallWithLarry.com