Calculate the Cash Gap on a Rewire
Calculate the cash gap created by material purchases, payroll, billing milestones, and customer payment timing.
A $38,000 residential rewire has good margin but early cash exposure. Calculate the gap and choose better billing terms. Cash gap = cash-out timing minus cash-in timing; manage it with deposits, progress milestones, fast invoicing, and aligned supplier terms. The common shortcut is trusting gross margin and ignoring timing. That makes the contractor the bank for the customer. Before 10% deposit, bill 80% after rough-in inspection, final 10% after trim. Supplier paid before rough-in money arrives. After 30% material deposit, 40% rough-in milestone, 20% trim milestone, 10% final. Cash exposure is reduced before payroll strain hits. Map cash out Materials…
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