Construction Projections: Seeing Cash and Margin Trouble Before It Costs You | Ep. 400

September 15, 2026|Supun Hettiarachchi
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Your WIP tells you where your jobs stand today. Your backlog tells you the work you’ve already got. Neither one tells you where your cash, your margin, and your crews are headed six months out. That’s the job of a projection, and most contractors either do it badly or don’t do it at all. In Part 8 of our series, CPA Kathe Barrington breaks down how to see trouble coming before it costs you.

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What Projections Are and How They Connect to WIP and Backlog

A WIP is a snapshot. It shows your jobs at one point in time. The problem is those jobs all finish at different points.

A projection takes that snapshot and pushes it forward. You lay your backlog out month by month and figure out where the revenue, the cash, and the workforce land as each job runs its course.

“You need to take that out as far out as those jobs are going,” Kathe says. If your work wraps in a year, you project a year. If you’ve got multi-year jobs, you go further.

Who Should Own Projections in Your Company

Here’s the part owners don’t want to hear. This is the most complicated piece of the whole financial process. It belongs to your CFO.

If you’re an owner who’s run the business for decades and you know how to do it yourself, fine. Kathe works with a few of those. Most owners aren’t those owners.

So where do you stay involved? The timeline and the information. You feed the numbers. Someone who does this for a living turns them into a forecast you can trust.

How to Know Your Projections Are Accurate

If you’re handing this to someone else, how do you know they’re right? You sit in it.

Kathe builds projections month by month and walks through them with the owner. Eighteen months is a good working length. For the bank, you might only go to the end of the fiscal year. For running your company, you go as far as your jobs go.

Do this monthly. Quarterly is the floor. Most contractors don’t do it nearly often enough, and it shows up in their decisions.

What Bad Projections Actually Cost You

Get this wrong and you can’t make good decisions. You hire too soon or too late. You scale back at the wrong time. Your cash flow forecast is off before you start.

Kathe puts it in the cockpit. “A pilot, if they miscalculate by an inch, they’re going thousands of miles off over an eleven-hour journey.” A small error at the start is a big miss at the end.

Best Practices: The Timeline and the Bell Curve

Two things drive a reliable forecast.

First, a real timeline. “This is a mobile product. You’re not actually just keeping it fixed,” Kathe says. Schedules move. Your projection moves with them.

Second, the shape of the job. Most jobs run like a bell curve. They build up, they peak, they fizzle out. Know where that peak lands and you can plan cash flow, billings, and manpower around it instead of getting surprised by it.

Historical Job Data and the Choice Every Owner Makes

Your old jobs are a goldmine, but only if the numbers are honest. Kathe has watched people smooth their schedules by shifting costs or dumping burden onto jobs that “can take it.” Bad idea. You lose the one thing you’re after: the truth about your margins and your burden.

This is the heart-to-heart. You’ve got two choices. Play games with your numbers, or tell the truth in everything you report. Play games and next year’s estimate on a similar job is built on a lie. Tell the truth and you make better decisions every cycle.

How Projection Discipline Builds Trust With Your Bank and Bonding Company

Your original WIP numbers come from your original projection. As the job runs, you update. The closer your finish lines up with your start, or the better you can explain why it moved, the more integrity your financials carry.

A lot of owners love cushion. Their jobs always look better at the end. Kathe isn’t sold. If you estimate 15% and always land at 25 or 30 with no real explanation, the question isn’t whether you got lucky. It’s whether you actually know your numbers.

“If you have a reputation that your WIP schedule doesn’t ever match from the beginning to the end of a job, that is going to hurt your trust factor,” she says. Bank and bonding notice.

What Separates Top Contractors From the Rest

It starts at the top. “First and foremost, having a mindset from the very top of integrity and honesty,” Kathe says.

If your PMs aren’t fully forthright, the numbers feeding your projection are already bad. The best contractors hold everyone to a standard, and they hold themselves to it too. That ties straight back to the field-to-office reporting we’ve covered in earlier episodes. Accurate projections start with accurate reporting from the job.

Your 30-60-90 Day Plan

Want to get a handle on this? Start here.

First 30 days: make sure the original budget in your system is right. Reconcile what you estimated against what the job is actually doing.

Every month after: go job by job, line by line, and confirm each one is still on track. Sixty days, ninety days, it’s the same move. Keep going. Don’t back off.

Kathe is blunt about it. The thing that got you there is the thing that keeps you there. This is a discipline, not a one-time cleanup.

Order in the Chaos

Construction is chaos by nature. Multiple parties on every job. Conditions change. Schedules change. You control what you can control.

GCs actually have it easier here. They’re holding the schedule. Subs are at the mercy of the GC, the owner, and every other sub on the site. Either way, clear projections give you an edge on the individual job. You know when to spend your political capital and when to hold it. You know whether to draw on your line of credit or bill a little heavier this month. When you’re under-billed on a job with 60-to-90-day collections and no line of credit to bridge it, that’s not a surprise you want to meet in real time.

Get Your Projections Right

If you can’t do this yourself, get a CFO or get help. Accurate projections are how you see margin erosion, cash problems, and staffing needs before they turn into expensive surprises.

Subscribe to Construction Genius on YouTube, Apple, or Spotify. Leave a rating and review so more contractors find the show. And if you want a clearer picture of where your company is headed, start at constructiongenius.com.

The Full Construction Accounting Series With Kathe Barrington

Start at the beginning or jump to what you need. Watch the whole series in one place on the Construction Accounting Series playlist: https://www.youtube.com/playlist?list=PLNqgaQ0mEF1w

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Construction Genius is hosted by Eric Anderton.

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