Business FinancesQuestion 1132 of 1605
Poor cash flow on a construction project is MOST often caused by:
a.Paying suppliers early with cash discounts
b.Charging too much markup
c.Keeping detailed job-cost records
d.Paying labor and materials before the owner pays progress billings
Explanation
Contractors typically must pay for labor and materials well before the owner pays progress billings, and retention further delays receipts. This timing gap drains cash even on profitable jobs, which is why working capital and cash-flow planning are essential.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)