The Construction CFO Playbook: From Bookkeeper to Strategic Leader

By Martin · 15 min read · Updated 2026-02-02

In my 20+ years working with construction companies, I've watched the same pattern play out dozens of times: a contractor grows from $5M to $20M to $50M in revenue, adding projects, equipment, and headcount. But their financial management stays stuck at the $5M level—basic bookkeeping, annual tax prep, reactive decision-making.

Then one day they wake up to discover they've got $15M in backlog but no cash to fund it. Or they're profitable on paper but can't make payroll. Or they've been losing money on half their jobs for six months without knowing it.

The problem isn't harder work or better field execution. It's the absence of CFO-level financial leadership.

This guide is the playbook I wish every contractor had from day one. It's about transforming financial management from a compliance exercise into a strategic advantage—the difference between building a business that scales profitably and one that grows until it implodes.

The Financial Leadership Gap

Most construction companies have a bookkeeper. Some have a controller. Very few have true CFO-level financial leadership, especially in the under-$50M space. Understanding this gap is the first step to closing it.

What You Typically Have: Bookkeeping

The bookkeeper handles essential tasks:

This is backward-looking, compliance-focused work. It answers "what happened last month?" but not "what will happen next month?" or "what should we do differently?"

Nothing wrong with this—bookkeeping is essential. But it's not strategic finance. It's the foundation, not the building.

What's Missing: Strategic Finance

CFO-level thinking asks different questions:

These questions require forward-looking analysis, industry expertise, and strategic thinking. They're the domain of a CFO—whether that person has the title or not.

The Consequences of the Gap

I've seen what happens when companies grow without closing this gap:

Cash Flow Crises: Revenue grows but cash shrinks. The company is profitable on paper but constantly scrambling to make payroll. Often caused by funding growth with receivables while overhead expands.

Invisible Job Losses: Projects lose money for months before anyone notices. By the time it's obvious, it's too late to recover. Proper WIP reporting would have caught it early.

Missed Bonding Opportunities: The surety wants better reporting than you can provide, limiting your bonding capacity and therefore your growth ceiling.

Poor Bidding Decisions: You don't know your true overhead rate or job costs, so your bids are based on guesses and competitors' numbers rather than your actual costs.

Reactive Banking Relationships: Your bank asks for quarterly financials and you scramble to produce something presentable. Meanwhile, you're managing to loan covenants you don't fully understand.

Founder Burnout: The owner becomes the de facto CFO by default, spending nights and weekends in spreadsheets instead of leading the business or developing client relationships.

The Common Thread: These problems stem from treating financial management as a necessary evil rather than a strategic function. The companies that break through treat finance as a competitive advantage.

Key Insight: You don't need a six-figure CFO salary to get CFO-level thinking. You need the systems, processes, and mindset. Whether it's a fractional CFO, a well-trained controller with CFO responsibilities, or an owner who invests in financial education, what matters is that someone is asking the strategic questions and building the systems to answer them.

What CFO-Level Thinking Looks Like

Let's contrast reactive bookkeeping with proactive financial management through real scenarios I've encountered.

Scenario 1: The Bidding Decision

Bookkeeping Approach: "We did a similar job last year for $850K and made money. This one's about the same size, so we'll bid $900K to be competitive."

CFO Approach: "Let's pull the actual costs from that job. It came in at $720K, so we netted $130K on $850K revenue—15.3% gross margin. But we had a $45K change order that saved us; without it, we'd have been at 10% margin.

This new job has higher material costs (steel is up 12% this year) and a tighter schedule (more overtime premium). Our current backlog has us at 85% capacity, so we should price for margin, not just to win.

After adjusting for current costs and risk, our true breakeven is $780K. To hit our 18% target margin, we need to bid $950K. If we bid $900K just to match competition, we're accepting 13.3% margin—below our threshold for the risk profile.

Recommendation: Bid $950K. If we don't win it, that's fine—we're nearly at capacity anyway and this job has schedule risk."

The Difference: One is anchoring to a round number and a feeling. The other is analyzing actual historical costs, adjusting for current conditions, assessing capacity constraints, and making a risk-adjusted pricing decision. That's CFO-level thinking.

Scenario 2: The Cash Crunch

Bookkeeping Approach: "We're short $80K for payroll Friday. We have $240K in receivables outstanding. I'll call our five biggest customers and ask them to expedite payment."

CFO Approach: "We have a cash problem, but the symptom isn't the disease. Let me run the numbers:

The real issue: we're funding growth with receivables. Every new job requires upfront labor and materials before we bill, creating a cash outflow. Our growth rate exceeds our working capital capacity.

Short-term fix: Yes, collect receivables aggressively. Draw the remaining $100K on our LOC to cover payroll and create buffer.

Medium-term fix: Renegotiate billing terms on new contracts to include mobilization payments and monthly billing instead of milestone-based. This accelerates cash conversion.

Long-term fix: We need to either 1) slow growth to match our capital availability, 2) secure additional working capital facility, or 3) improve our cash conversion cycle through better billing and collections.

Let's model a 13-week cash flow forecast to see exactly when we'll hit constraints again, then make strategic decisions about which path to take."

The Difference: One is reactive firefighting. The other is root cause analysis, immediate stabilization, and strategic planning to prevent recurrence. That's the CFO mindset.

Scenario 3: The Equipment Purchase

Bookkeeping Approach: "The excavator rental is costing us $8,500/month. We can buy a used one for $185,000. Over two years, that's $204K in rental vs. $185K purchase. We should buy."

CFO Approach: "Let's build a complete analysis:

Rental costs: $8,500/month × 24 months = $204,000 Purchase costs:

But wait, there's more to consider:

My recommendation: Continue renting unless we have confirmed utilization above 85% for the next 36 months AND we have excess equipment line capacity AND this equipment type is low tech risk (stable technology).

In this case, our pipeline shows only 18 months of confirmed excavator-heavy work. Rent for now, revisit in 12 months when we have better visibility."

The Difference: One looks at simple payback. The other considers total cost of ownership, opportunity cost, utilization risk, balance sheet impact, and strategic timing. That's financial leadership.

The Pattern: Depth Over Speed

Notice the pattern: CFO-level thinking takes longer upfront but prevents costly mistakes. It's the difference between:

Key Insight: Most contractors have plenty of operational expertise. What they lack is financial rigor applied to strategic decisions. CFO-level thinking isn't about being more conservative or risk-averse—it's about understanding risk, quantifying it, and making informed decisions rather than guesses dressed up as strategy.

The Core CFO Toolkit

CFO-level financial management rests on four foundational systems. Get these right and everything else becomes easier.

1. WIP Reporting (The Foundation)

For contractors using percentage-of-completion accounting, WIP reporting is the single most critical financial process. It determines:

CFO-Level WIP Practice:

Without solid WIP reporting, you're flying blind. Your P&L is fiction, your balance sheet is questionable, and you don't know which jobs are winning or losing until they're done—too late to fix.

I've covered WIP extensively in other guides. The CFO takeaway: this isn't accounting busywork. It's the diagnostic system that tells you the truth about your business.

2. Cash Flow Forecasting (The Crystal Ball)

Construction is a cash flow business disguised as a revenue business. You can be "profitable" while running out of cash. The CFO toolkit requires robust cash forecasting.

The 13-Week Cash Flow Model:

This is the gold standard for construction cash management. Every week for the next 13 weeks, forecast:

Cash In:

Cash Out:

Net Cash Flow: Cash in minus cash out Cumulative Cash Balance: Running total including starting cash and LOC availability

Why 13 Weeks?

CFO Use Cases:

Example Scenario: Week 7 shows projected cash balance dropping to $45K, below your $100K safety threshold. Looking at the detail:

CFO Response:

Crisis averted because you saw it coming. That's the value of cash forecasting.

3. KPI Dashboard (The Scorecard)

You can't manage what you don't measure. But most contractors track too few metrics or the wrong metrics. A CFO-level dashboard focuses on leading and lagging indicators that predict business health.

Essential Construction KPIs:

Revenue & Profitability:

WIP & Billing:

Cash & Working Capital:

Bonding & Banking:

Operational:

CFO Best Practice:

Dashboard Red Flags:

The dashboard shouldn't require a finance degree to understand. It's a communication tool that aligns the leadership team around key metrics and triggers proactive responses when numbers drift.

4. Labor Capacity Planning (The Governor)

Most contractors are limited not by market demand but by labor capacity. CFO-level thinking requires understanding this constraint and planning accordingly.

The Basic Model:

  1. Calculate Available Labor Hours:

    • Total employees × 2,080 hours/year (40 hrs/week × 52 weeks)
    • Minus vacation, holidays, sick time (~160 hrs/employee)
    • Minus training, meetings, shop time (~120 hrs/employee)
    • Minus realistic utilization gap (~15% = ~280 hrs/employee)
    • = ~1,520 billable hours/employee/year

  2. Calculate Current Commitment:

    • For each active job: estimated hours remaining
    • Sum across all active jobs
    • Divide by 1,520 to get "employee equivalents required"

  3. Calculate Capacity Available:

    • Available employee equivalents (from step 1)
    • Minus committed equivalents (from step 2)
    • = Available capacity for new work

Example:

CFO Applications:

Advanced Considerations:

Many contractors take on too much work, assuming they'll "figure it out." Then they're forced to hire too fast, use less-qualified labor, work excessive overtime (killing margins), or delay projects (damaging customer relationships).

CFO-level thinking quantifies capacity before committing to work.

Key Insight: The CFO toolkit isn't about complexity—it's about having the right information at the right time to make better decisions. WIP tells you profitability, cash forecasting tells you sustainability, KPIs tell you health, and capacity planning tells you your growth governor. Master these four systems and you have the foundation for scaling profitably.

Building Your Financial Rhythm

CFO-level financial management requires cadence—regular processes that become organizational habits. Here's the rhythm I've implemented with dozens of contractors.

Weekly: The Cash Review (30 minutes)

Every Monday morning:

Review:

Actions:

Attendees: CFO/Controller + Owner (for small companies) or CFO + CEO + COO (for larger)

Purpose: Cash never surprises you. Problems are caught with time to respond.

Common Output:

Monthly: The Financial Close (10-15 days)

Timeline:

CFO Financial Package Contents:

Common Mistakes:

Monthly: The Financial Review Meeting (60-90 minutes)

Mid-month, after financials are closed:

Agenda:

  1. P&L Review (20 min):

    • Revenue vs. budget (are we on track for annual targets?)
    • Gross profit % trends (margin fade?)
    • Overhead variances (any surprises?)
    • Bottom line and YTD performance

  2. WIP Deep Dive (30 min):

    • Each job's current status (% complete, margin estimate)
    • Jobs with significant estimate changes (why?)
    • Jobs with unusual over/under positions (risk?)
    • Completed jobs post-mortem (final margin vs. estimate)

  3. Cash & KPIs (15 min):

    • Cash position and forecast
    • Key metric trends (DSO, working capital, etc.)
    • Banking/bonding compliance status

  4. Strategic Discussion (15 min):

    • Capacity assessment (can we take on more work?)
    • Hiring needs
    • Equipment or facility decisions
    • Upcoming bid opportunities (bid or pass?)

Attendees: Leadership team (Owner/CEO, CFO, Operations, Project Managers for jobs under discussion)

Purpose: Shared understanding of financial position, collaborative problem-solving, strategic alignment

Output: Action items assigned, decisions made, issues escalated

CFO Role: Facilitate discussion, provide context and recommendations, challenge assumptions, document decisions

Quarterly: The Strategic Review (Half day)

Every quarter, step back from operations:

Agenda:

  1. Quarterly Performance vs. Annual Plan:

    • Are we on track for revenue, profit, cash goals?
    • What's changed since we made the plan?

  2. Rolling 12-Month Forecast:

    • Update revenue and profit projections for next 4 quarters
    • Assess risks and opportunities

  3. Strategic Initiatives Check-in:

    • Progress on key initiatives (new market entry, technology implementation, etc.)
    • Resource allocation review

  4. Banking & Bonding Review:

    • Prepare quarterly bank package
    • Review bonding capacity and any upcoming needs
    • Relationship check (any concerns from bank or surety?)

  5. Major Decisions:

    • Equipment purchases
    • Facility expansion
    • New market or service line entry
    • Organizational structure changes

Attendees: Executive team + Board/Advisors if applicable

CFO Role: Prepare comprehensive analysis, facilitate strategic discussion, document decisions and update annual plan

Annually: The Planning Cycle (Multiple sessions)

Q4 of each year, plan for the next:

The Annual Plan includes:

  1. Revenue Plan:

    • By quarter, by market, by service line
    • Based on pipeline visibility, historical win rates, market conditions

  2. Gross Profit Plan:

    • Target margins by work type
    • Assumes realistic productivity and pricing environment

  3. Overhead Budget:

    • Staffing plan (hires, raises, benefits)
    • Facilities, equipment, technology
    • Marketing, insurance, professional services
    • Owner compensation and distributions

  4. Capital Plan:

    • Equipment purchases or leases
    • Facility improvements
    • Technology investments
    • Working capital requirements

  5. Cash Flow Projection:

    • Monthly cash flow forecast for the year
    • Financing needs (LOC utilization, term debt, equity)
    • Distribution capacity

  6. Strategic Initiatives:

    • 3-5 major initiatives for the year (not 20)
    • Owner and resource assignments
    • Success metrics

CFO Role: Lead the process, build financial models, stress-test assumptions, create accountability structure

Common Pitfalls:

The Rhythm Creates Discipline

Most contractors don't fail because of one big mistake. They fail because of accumulated small mistakes—missed signals, deferred decisions, reactive firefighting.

The financial rhythm creates forcing functions: you WILL review WIP monthly, you WILL discuss cash weekly, you WILL plan annually. These processes catch problems early and create space for strategic thinking.

Key Insight: Financial discipline isn't about creating bureaucracy—it's about creating predictability. When you have a rhythm, everyone knows when financial discussions happen, what information will be available, and what decisions need to be made. This transforms finance from "that thing accounting does" into a shared leadership responsibility.

Cash Flow Management for Contractors

Construction cash flow is uniquely challenging. You fund work before you're paid, customers hold retainage, payment terms are often slow, and seasonal swings can be dramatic. CFO-level cash management is essential.

The Unique Challenges

1. The Cash Conversion Lag

Unlike retail (sell today, get paid today) or SaaS (subscription paid upfront), construction has a long cash cycle:

Total cycle: 57+ days from incurring cost to collecting cash (excluding retainage).

During those 57 days, you fund the work with working capital. If you're growing, every new job creates a cash outflow before the cash inflow. This is why contractors can be "profitable but broke."

2. Retainage Trap

Retainage (typically 5-10% of each invoice held until project completion) accumulates as projects progress. On a $10M annual revenue run rate with 10% retainage and 6-month average project duration, you'll have $500K+ in retainage receivable at any given time.

This is your cash, trapped in the balance sheet. It's working capital you can't deploy. And if a project drags out or disputes arise, retainage release can be delayed months or years.

3. Slow Pay Reality

Contractual payment terms are often 30 days. Actual payment averages 45-60 days in construction. Private owners are better than public (ironically). Small owners are slower than large.

Some customers use contractors as their bank—stretching payment to manage their own cash flow. If you don't track and manage this aggressively, DSO creeps up until you're essentially providing free financing to customers.

4. Seasonal Swings

Many contractors experience dramatic seasonal patterns:

Cash flow planning must account for these patterns. A contractor doing $12M annual revenue might do $2M in Q1, $2.5M in Q2, $4M in Q3, $3.5M in Q4. The overhead is steady, but revenue and cash vary dramatically.

The 13-Week Cash Flow Model (Detailed)

I mentioned this earlier as part of the CFO toolkit. Let's dive deeper into implementation.

Building the Model:

Column Structure:

Cash Inflow Categories:

Cash Outflow Categories:

Forecasting Tips:

For Customer Payments:

Example: Industrial Park job billing schedule shows $150K pay app submitting Week 3. Customer typically approves in 7 days, pays in 35 days. Forecast $150K cash inflow in Week 9, but mark it yellow (moderate confidence) until pay app is actually approved.

For Payroll:

For Subcontractors:

For Materials:

Weekly Update Process:

  1. Drop last week from the forecast
  2. Add a new week 13 at the end
  3. Update actuals for the week just completed
  4. Revise near-term forecasts based on new information
    • Did customer payment hit as expected?
    • Did cost overrun on a job require additional material purchase?
    • Did billing schedule shift?
  5. Flag any issues in the next 4 weeks
  6. Communicate to decision-makers

Using the Forecast:

Scenario 1: Cash Crunch Identified Week 7 shows $35K cash balance, below your $100K minimum.

CFO Response Options:

Scenario 2: Excess Cash Identified Week 10 shows $425K cash balance, well above normal operating needs.

CFO Response Options:

Scenario 3: Growth Opportunity Evaluation New project opportunity: $1.2M job, 6-month duration, 40/30/20/10 billing schedule.

CFO Analysis:

This is how you grow strategically rather than opportunistically.

Cash Flow Best Practices

1. Bill Aggressively Don't wait for the exact milestone. If you're at 98% of a billing trigger, submit the pay app. The customer might approve it, and even if they reduce it slightly, you've accelerated cash.

2. Collect Religiously

Don't let receivables age. Every day past terms is a day you're providing free financing.

3. Negotiate Payment Terms Upfront Don't accept long payment terms just to win work. "Net 60" vs. "Net 30" is a 30-day swing in your cash cycle. On a $2M project, that's ~$167K in additional working capital you need to fund.

Negotiate for:

4. Manage Subcontractor Terms Pay subs based on when you get paid, not arbitrary schedules. Common approach: "Payment to subcontractor within 7 days of receipt of payment from owner for subcontractor's work."

This aligns your cash outflow with your cash inflow. Yes, subs prefer faster payment, but the contract terms should reflect the reality of construction cash flow.

5. Use Retainage Strategically If you're holding 10% retainage on subs but only 5% is held from you, that 5% difference is a cash source. On a $5M job with $3M in subcontracted work, that's:

Just track it carefully and release sub retainage appropriately when the work is complete.

6. Build Cash Reserves Target: 15-30 days of operating expenses in liquid cash reserves (not LOC—actual cash).

For a contractor with $500K monthly overhead, that's $250K-$500K in reserves. This is your shock absorber for late payments, unexpected costs, or seasonal dips.

7. Line of Credit is Your Friend Maintain a relationship LOC even if you don't always need it. Typical structure:

Use it strategically, not as permanent financing. If you're perpetually at 90%+ utilization, you have a capital structure problem, not a temporary cash timing issue.

Key Insight: Construction cash flow management is about visibility and proactivity. The 13-week forecast is your early-warning system. The practices above are your response playbook. Together, they prevent the "profitable but broke" trap that kills contractors.

Bonding and Banking Relationships

Your banker and surety underwriter are critical partners in growth. CFO-level financial management means managing these relationships proactively, not just responding to their requests.

Understanding What Banks Want

Your banker is managing risk. They've lent you money (term debt for equipment, LOC for working capital) and need confidence you'll repay it. They evaluate this through:

1. Financial Strength:

2. Financial Quality:

3. Loan Covenant Compliance:

4. Communication:

CFO Best Practices for Banking:

Quarterly Package Timing: Don't wait for the bank to ask. Send your quarterly package by the 20th of the month following quarter-end. Include:

Annual Review Preparation: Most loans require annual renewal or review. Prepare thoroughly:

Schedule the meeting proactively. Come with requests ready (increase LOC, add equipment line, etc.).

Proactive Communication: If something changes—big job win, key employee departure, customer bankruptcy, major cost overrun—tell your banker before they hear it elsewhere. They hate surprises.

Example: "We had a significant cost overrun on the Medical Center job—about $200K more than estimated. It will impact Q3 profit, dropping us from 8% net margin to 5% for the quarter. We've analyzed the causes and implemented controls to prevent recurrence. Our full-year forecast is still on track, and we remain compliant with all covenants."

This is CFO-level communication. You're treating the banker as a partner, not an adversary.

Understanding What Sureties Want

Surety underwriting is about capacity. They're guaranteeing you can complete bonded work, so they evaluate:

1. Financial Capacity:

2. Operational Capability:

3. Character & Track Record:

Bonding Capacity Calculation (Simplified):

Bonding Capacity = Working Capital × Multiplier

Multiplier typically ranges from 5x to 15x depending on:

Example:

This means the surety will bond up to $20M in total backlog (all active work combined). If you have $14M in current backlog, you can bond up to $6M in new work.

CFO Best Practices for Bonding:

Annual Surety Submission: Even if not required, provide annual update:

Prequalify Large Jobs: Before bidding a job that's significantly larger than typical work, ask the surety: "Can you bond this?" Get written confirmation. Nothing worse than winning a job you can't bond.

Transparency About Problems: If a job goes bad—major loss, dispute, litigation—disclose it. The surety will find out eventually (they may get a claim). Managing the narrative proactively maintains the relationship.

Maintain Margin Discipline: Sureties hate margin fade. If your WIP shows bid margins of 18% eroding to 10-12% at completion, they'll reduce capacity. Maintain estimating discipline and change order management.

Build Relationships, Not Transactions: Meet with your surety underwriter quarterly, even if you don't need anything. Update them on business developments, ask for market insights, get their feedback on your financials. When you need a favor (expedited bond, larger capacity), the relationship equity pays off.

When to Refinance or Renegotiate

Signs You've Outgrown Your Banking Relationship:

When to Switch Sureties:

CFO Process for Shopping:

  1. Package your business professionally: Financial summary, WIP, backlog, capabilities statement
  2. Get referrals: Ask other contractors, CPAs, attorneys
  3. Interview multiple options: Don't just take the first offer
  4. Negotiate: Rates, fees, terms, covenants
  5. Transition thoughtfully: Give existing partners notice, maintain relationships (you might be back)

Key Insight: Banking and bonding relationships are strategic assets. A great banker or surety partner enables growth. A poor one constrains it. Invest in these relationships like you invest in customer relationships—with transparency, communication, and mutual respect. The CFO's role is to ensure the financial presentation supports the relationship and positions the company for increasing capacity as it grows.

Growth Planning

Growth isn't always good. Profitable, sustainable growth requires planning, discipline, and sometimes the courage to say no. This is CFO thinking at its most strategic.

The Growth-Profitability Tradeoff

The Trap: Revenue is growing 30% year-over-year. Backlog is strong. The company feels successful. Then you close the year and discover:

What Happened?

Unmanaged growth often destroys profitability:

The CFO Question: What's the optimal growth rate given our capital, capacity, and capability?

The When to Bid Decision Framework

Not every opportunity deserves a bid. CFO-level discipline means qualifying opportunities rigorously.

The Go/No-Go Framework:

1. Strategic Fit

2. Financial Attractiveness

3. Operational Feasibility

4. Risk Assessment

5. Relationship Value

CFO Role: Quantify the decision. Build a simple scorecard (1-5 rating on each factor). Threshold: Must score 20+ out of 25 to bid. This removes emotion and creates consistency.

Example:

Even though operationally feasible, the financial terms and lack of strategic value make this a pass.

Capacity as the Growth Governor

I covered capacity planning earlier. In the growth context, capacity is often the limiting constraint, not market demand.

The Capacity-Constrained Growth Model:

Start with capacity:

Calculate growth capacity:

Example:

The CFO Recommendation: Pause aggressive bidding. Focus on:

  1. Executing current backlog profitably
  2. Hiring and training 2-3 additional crew members
  3. Revisiting growth plan in Q3 when capacity expands

This requires discipline. Turning down work feels wrong when backlog is your measure of success. But overbidding your capacity destroys profitability and quality.

The Profitability-First Growth Model

An alternative to "grow as fast as possible":

Year 1: Stabilize

Year 2: Optimize

Year 3: Scale

The CFO Insight: Profitable, well-capitalized companies can grow faster and more sustainably than thinly-profitable, cash-strapped companies. Sometimes slowing down to build the foundation enables faster growth later.

Key Insight: Growth is a choice, not a destiny. The CFO's role is to quantify the costs and constraints of growth, model sustainable growth rates, and ensure the organization grows profitably rather than just growing. This often means saying "no" to opportunities that don't meet thresholds—a discipline most contractors lack.

Hiring Financial Leadership

At some point, the owner can't be the de facto CFO anymore. How do you build financial leadership capacity?

The Org Chart Evolution

Stage 1: Part-Time Bookkeeper (< $3M revenue)

Stage 2: Full-Time Bookkeeper ($3M-$7M revenue)

Stage 3: Controller ($7M-$25M revenue)

Stage 4: Controller + CFO ($25M-$75M revenue)

Stage 5: Full Finance Team ($75M+ revenue)

The Fractional Alternative:

Many contractors in the $5M-$30M range can't justify a full-time CFO salary ($150K-$250K+) but need CFO-level thinking.

Fractional CFO model:

When Fractional Works Well:

When You Need Full-Time:

What to Look For

Bookkeeper/Staff Accountant:

Controller:

CFO:

Red Flags:

Making the Hire

The Interview Process:

For Controllers and CFOs, ask:

  1. "Walk me through how you'd set up WIP reporting for our company."
    • Tests construction accounting knowledge
  2. "How would you evaluate whether we should bid a $3M project given our current backlog?"
    • Tests strategic thinking
  3. "Our bank is asking us to improve our current ratio. What levers would you pull?"
    • Tests practical problem-solving
  4. "Describe a time you caught a financial problem early and what you did about it."
    • Tests proactivity and communication

Check References Thoroughly:

The Compensation Question:

Market Rates (2026, rough guidelines):

Beyond Base:

Key Insight: Hiring financial talent is one of the highest-ROI investments a contractor makes. A great controller or CFO pays for themselves many times over through better decision-making, improved margins, stronger banking/bonding relationships, and freed-up owner time. Don't cheap out on this role—it's too important.

Technology and Automation

Construction has lagged other industries in financial technology adoption. That's changing. The CFO should drive technology strategy to improve efficiency and insight.

The Technology Stack

Core Accounting:

WIP Reporting:

Project Management:

Estimating:

Time Tracking:

Document Management:

Reporting/BI:

What to Automate First

If you're still mostly manual, prioritize automation ROI:

Priority 1: Job Cost Integration Eliminate manual entry of costs into WIP schedules. Job costs should flow automatically from accounting system to WIP tool.

ROI: Saves 2-4 hours/month, reduces errors, enables more frequent WIP reporting

Priority 2: Time Tracking Field employees enter time daily via app instead of paper timesheets transcribed by office staff.

ROI: Saves 5-10 hours/week in data entry, improves job costing accuracy, enables real-time labor cost visibility

Priority 3: Payment Applications Automated pay app generation from project management system instead of manual Excel preparation.

ROI: Saves 1-2 hours per pay app, reduces billing errors, accelerates invoicing

Priority 4: Reporting Automation KPI dashboard that pulls data automatically instead of manual monthly preparation.

ROI: Saves 3-5 hours/month, enables real-time visibility, improves decision speed

Priority 5: AP Automation Bill.com or similar for invoice approval workflow and payment processing.

ROI: Saves 5-10 hours/week, improves controls, provides better cash flow visibility

Integration is Key

The biggest tech mistake contractors make: buying point solutions that don't talk to each other.

The Result:

CFO Approach: The Integration Map

Before buying any new system, ask:

  1. What systems does it need to integrate with?
  2. How does data flow? (API, file export/import, manual?)
  3. What's the error rate and reconciliation process?
  4. Who owns the integration maintenance?

Example Integration Flow:

  1. Time tracking app → Accounting system (labor costs)
  2. Accounting system → WIP tool (costs to date, contract values)
  3. WIP tool → Reporting dashboard (KPIs)
  4. PM system → WIP tool (% complete estimates, change orders)

Each arrow represents an integration point that must be robust and maintained.

The Build vs. Buy Decision

Many contractors build custom solutions in Excel or Access. When should you buy instead?

Build (Custom) When:

Buy (Commercial) When:

The Hidden Cost of Custom:

CFO Bias: Buy for core processes (accounting, WIP, time tracking), build for niche analytics and reporting where your specific business logic matters.

Change Management

Technology doesn't fail for technical reasons. It fails because people don't use it.

CFO Role in Tech Adoption:

  1. Executive Sponsorship: The CFO must visibly champion the new system.

  2. Training Investment: Budget 10-15% of software cost for training, not just initial but ongoing.

  3. Workflow Redesign: Don't just automate bad processes—fix the process, then automate.

  4. Incentive Alignment: If PMs need to submit estimates via new system, make that part of their job expectations and performance review.

  5. Quick Wins: Target 2-3 quick wins in first 90 days to build momentum.

  6. Feedback Loops: Monthly check-ins with users—what's working, what's not?

Key Insight: Technology is a tool, not a strategy. The CFO's job is to ensure technology serves the business strategy (better decisions, faster insights, less manual work), not the other way around. Start with the process you want, then select technology that enables it. And invest in change management as much as you invest in the software itself.

Key Takeaways

This guide has covered a lot of ground. Here's what matters most:

1. The gap between bookkeeping and CFO-level finance is the difference between knowing what happened and shaping what happens next. Most contractors have the former but need the latter to scale profitably.

2. CFO-level thinking is about depth, not speed. It's taking the time to analyze bidding decisions, model cash flow impacts, quantify capacity constraints, and make data-informed strategic choices rather than reactive gut calls.

3. The four-pillar CFO toolkit is non-negotiable: WIP reporting (profitability visibility), cash flow forecasting (sustainability planning), KPI dashboards (health monitoring), and capacity planning (growth governance). Master these and you have the foundation.

4. Financial rhythm creates discipline. Weekly cash reviews, monthly financial closes, monthly leadership reviews, quarterly strategic sessions, annual planning. This cadence catches problems early and creates space for strategic thinking.

5. Construction cash flow is uniquely challenging. Long conversion cycles, retainage traps, slow pay, seasonal swings. The 13-week cash forecast is your early-warning system. Use it religiously.

6. Banking and bonding relationships are strategic assets. Treat them as partnerships, communicate proactively, present financials professionally, and manage covenants/capacity thoughtfully. These relationships enable or constrain growth.

7. Not all growth is good growth. The optimal growth rate balances market opportunity with capital availability, capacity constraints, and profitability discipline. Sometimes saying "no" to an opportunity is the most strategic decision you can make.

8. You don't need a six-figure CFO to get CFO-level thinking. Fractional CFOs, well-trained controllers with expanded roles, or owners who invest in financial education can all provide strategic financial leadership. What matters is that someone is asking the right questions and building the systems to answer them.

9. Hire financial talent carefully. Construction accounting is specialized. Look for industry experience, strategic thinking, communication skills, and cultural fit. Check references thoroughly. This is one of the highest-ROI hires you'll make.

10. Technology should serve strategy, not drive it. Automate strategically (job cost integration first, then time tracking, then reporting). Prioritize integration over features. Invest in change management as much as software. And remember: technology doesn't fix bad processes—it just makes them faster.

The Ultimate CFO Insight: The contractors who thrive aren't necessarily the best builders or the best salespeople. They're the ones who combine operational excellence with financial discipline. They know their numbers, manage their cash, plan their growth, and make strategic decisions based on data rather than hope.

That's the CFO playbook. It's not glamorous. It won't get featured in trade magazines. But it's the foundation of every construction company that scales profitably and sustainably.

When you're ready to implement these systems and processes, tools like ChainLink CFO are designed to make CFO-level financial management accessible to contractors of all sizes. But the principles remain the same whether you're using purpose-built software or sophisticated spreadsheets: accurate data, timely analysis, strategic thinking, and disciplined execution.

The question isn't whether you need CFO-level financial leadership. It's whether you'll build it before you hit the growth ceiling—or after a crisis forces you to.

I hope you choose before.