The number one question we get from roofing and construction business owners: “Why does my P&L show I’m profitable, but I never have cash?”
The answer usually comes down to one misunderstanding: the difference between your cash balance and your available cash.
What’s the Difference?
Cash balance is simple. It’s what shows up when you log into your bank account. If the bank says you have $50,000, that’s your cash balance.
Available cash is different. It’s what you actually have available to spend after you account for:
- Retainage being held on completed jobs
- Outstanding bills that haven’t been paid yet
- Upcoming payroll
- Quarterly tax payments
- Any other committed expenses
Most roofing bookkeeping systems track the first number. But the second number is what actually matters when you’re making decisions about hiring, bidding, or taking on new work.
Why This Matters for Roofing Companies
Roofing and construction accounting works differently than other industries because of how payment timing works.
You might have $100,000 in the bank today. But if:
- $30,000 is retainage you won’t collect for 60 days
- $25,000 in vendor bills are due this week
- $20,000 in payroll hits on Friday
- $15,000 in quarterly taxes are due next month
Your available cash isn’t $100,000. It’s $10,000.
That’s the gap that causes problems.
How Construction Job Costing Affects Available Cash
One of the biggest culprits? Inaccurate construction job costing.
When job costs aren’t tracked properly:
- You think a job was profitable, so you think you have more cash than you do
- Materials or labor get coded to the wrong job
- Overhead gets mixed into job costs
- You’re making decisions based on incomplete information
Good roofing accounting means knowing not just how much cash you have, but how much of that cash is truly available vs already spoken for.
What to Track Instead
Here’s what we help roofing companies track in their construction bookkeeping:
1. Bank balance (the raw number)
2. Committed cash:
- Retainage held (by job and expected release date)
- Outstanding payables
- Upcoming payroll
- Scheduled tax payments
3. Available cash (bank balance minus committed cash)
4. Cash runway (how many weeks you can operate on available cash if no new revenue comes in)
This isn’t complicated accounting. It’s just tracking what most roofing bookkeeping systems don’t track by default.
The Weather Delay Reality Check
This becomes especially critical during weather delays – like the ice storms we’re seeing this week.
When work stops but overhead doesn’t, you need to know:
- How many weeks can we cover payroll with no revenue?
- Which bills can we delay if needed?
- Do we need to tap our line of credit?
You can’t answer those questions with just your bank balance. You need to know your available cash.
How to Calculate Your Available Cash
Step 1: Note your current bank balance
Step 2: List all committed expenses in the next 30 days:
- Payroll (all upcoming pay periods)
- Vendor bills due
- Loan/LOC payments
- Tax payments
- Insurance premiums
Step 3: Add up retainage currently held
Step 4: Calculate: Bank Balance – Committed Expenses = Available Cash (excluding retainage since that’s longer-term)
Do this weekly. It takes 10 minutes and prevents surprises.
When to Get Help
If you’re tracking bank balance but not available cash, you’re flying blind.
Most roofing companies use a bookkeeper who handles transaction entry and reconciliations. That’s important. But it’s not the same as having someone track cash flow visibility.
That’s where roofing accounting services that specialize in construction bookkeeping come in. We build 13-week cash forecasts that show exactly when money comes in vs goes out – so you know about tight weeks before they arrive, not after.
The Bottom Line
Your bank balance tells you where you are today.
Your available cash tells you what you can actually do.
For roofing and construction companies dealing with retainage, job costing complexity, and variable payment timing, that difference matters.
Track both. Make decisions based on the second number.
That’s what keeps you ahead of surprises instead of constantly reacting to them.
Want help tracking available cash vs just bank balance? We specialize in roofing accounting and construction bookkeeping. Book your Discovery Call Today.
