The job is done. Work was solid. Customer was happy. And now it's Thursday, payroll is tomorrow, and the bank account is tighter than it should be for a business that had a good month.
You're not losing money. You're not running a bad business. The revenue is real. It's just not liquid yet. And it won't be for another six weeks.
This is the one that doesn't show up on a P&L. You can fix your costs. You can fix your pricing. And still feel broke. Because the third problem is timing.
Issue 01 → The costs that don't show up until the end of the year.
Issue 02 → The price built on the wrong number — markup blind to overhead and burden.
Issue 03 → The money you made that hasn't arrived yet. ← You're here.
Money goes out on a fixed schedule: materials on delivery, payroll every Friday, overhead on the first of the month. None of it waits for you to collect. Money comes in on a completely different schedule: whenever the customer gets around to it, which for most trades businesses is 40 to 57 days after you invoiced. That gap, every single month, is cash the business is floating out of its own pocket.
What it looks like on a timeline
The problem isn't the work. It's the gap between when money goes out and when it comes back. Below: typical vs. managed.
Two causes. Both fixable.
The first one is on you. The invoice doesn't go out when the job ends. A job wraps Tuesday. The invoice goes out Friday. Maybe the following Monday. Some operators take weeks. Some take months. Not deliberately. Invoicing feels like paperwork, the next job is already in the truck, and nobody chases it until the bank account tightens. Every day that invoice sits unsent, you're extending an interest-free loan to a customer who didn't ask for it and doesn't know they have it.
The second one is also on you. The industry pays slowly by default, 40 to 57 days on average for service trades, according to Sageworks data. But that number isn't fixed. Operators who shrink it aren't lucky, they're structured. Deposit collected before work starts. Progress billing on anything running more than a few days. Invoice sent within 24 hours of completion. Payment terms written into the contract before the job begins, not worked out after. Each of those moves the clock forward. Together, they can cut collection time in half.
Receivables is one piece of a bigger picture
Receivables are the fastest lever. You can change the billing process this week. But working capital has more components: how long you take to pay suppliers, and for operators carrying parts on their trucks or in a shop, how quickly inventory turns into billed work. Parts sitting on a van shelf are cash not covering payroll. Each of those is its own issue. This one is about the fastest thing to move: getting paid for work already done, sooner.
Where You Stand
Pull every invoice from the last 90 days. For each one, write down the date issued and the date paid (or today if still outstanding). Average the gap. For service trades, under 35 days is strong, 35 to 45 is average, over 45 is a drag on working capital worth fixing. If you can't pull this easily from your invoicing system, that's the first problem to solve.
Most owners need this. Few hear it. Pass it on.
Next: the wealth picture. What is your business actually worth? Trades businesses are selling at 5 to 8 times EBITDA. Most operators running $1M to $5M have no idea what moves that number, or that decisions they're making right now are either building it or destroying it.
