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A resource from RocketLevel for restoration company owners and finance leads, backed by decades of experience in the trade. About a 7 minute read.
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Make your own copy. Open the 90-Day Cash-Flow Forecast; Google will prompt you to save your own copy. Fill in the green cells and everything else calculates. It is yours to keep and edit. Its results are estimates built only from what you enter, so check them with your own accountant.
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There is a specific way profitable restoration companies get into trouble: they grow, the work piles up, the profit looks great on paper, and then one week they cannot make payroll. The cause is usually cash flow: the timing gap between paying for the work (labor, equipment, materials, all upfront) and getting paid for it (weeks on a clean file, a quarter or more on a commercial one). The Construction Financial Management Association (CFMA) Construction Financial Benchmarker put days in accounts receivable at 55 across 1,558 construction companies, mostly US-based, for FY2024, so 60 days is a little behind the pack and 90 is the tail rather than the norm. Your own number is the one you manage, and the sourcing behind those figures is in Ninety Days Is Where the Slow End of the Industry Sits.
Restoration has one of the harder cash profiles in the trades. You front the cost of every job, payroll runs every two weeks no matter what, and your payers (carriers, programs, and commercial clients) take their time. The faster you grow, the worse it gets, because every new job is more cash out before any comes back. That is how a company can be at its busiest the month before it misses a payroll.
The fix starts with looking at the right number. A profit forecast tells you the business is healthy; a cash forecast tells you whether you can make payroll in three weeks. Build a simple rolling forecast of cash in and cash out over the next 60 to 90 days: what you expect to collect and when, against what you have to pay and when. The moment a gap appears on that forecast, you have weeks to act instead of days. Many cash crises show up on that forecast well in advance, if someone is looking at it.
The forecast earns its keep by forcing this week's decisions into the open. When cash is tight, a good rolling forecast answers the questions that actually move money: which vendor has to be paid first, which receivable is tied to the next release of work, which line of credit should stay untouched instead of tapped out of habit, and which job has cash trapped inside it even though the work looks active. What you need is a spreadsheet that tells you what has to happen this week so the next three weeks do not get harder. When the tradeoffs get complex, a fractional CFO who knows construction and restoration, like Backbone CFO, runs exactly this kind of forecast for a living.
The time to arrange cash is when you do not need it. Two moves matter most: keep a cash reserve sized to your payroll and fixed costs, and secure a line of credit while the business looks healthy and a bank is happy to lend. An owner with a reserve and a credit line can take a big job, ride out a slow-paying client, and grow on their own terms. An owner without them is one slow month from a crisis.
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Do this: Build a rolling 90-day cash forecast and put a number on your reserve target (enough to cover payroll and fixed costs through your real payment timeline). Then secure a line of credit now, while the numbers look good, not during the slow month when you actually need it.
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You cannot make carriers pay faster overnight, but you can manage the gap. Four levers do most of the work, and two of them have legal edges you need to know before you pull them.
Deposits, inside your state's cap. Front money is the cheapest financing there is, and your state may limit how much of it you may take on residential work. California caps the down payment on a home improvement contract at $1,000 or 10 percent of the contract amount, whichever is less, under Business and Professions Code 7159.5(a)(3). That is a hard dollar ceiling, so a $90,000 rebuild still gets a $1,000 deposit, not $9,000. There is no emergency exception, which is the part that catches restoration shops.
A 2 a.m. water loss at a house is still a home improvement contract, and the narrow service-and-repair category at 7159.10 will not carry a mitigation deposit, because it applies only where the contract is $750 or less, the customer initiated the contact, and no payment is due or accepted until the work is completed. The one real relief is 7159.5(a)(8), which lifts the cap for a contractor who furnishes an approved performance and payment bond or lien completion bond.