Strong in the Field. Blind in the Back Office.
A $12.5M electrical contractor had a strong reputation and a growing project portfolio — and an owner spending significant time doing CFO work the business didn't have a CFO to do.
Electrical Contracting — $12.5M
Strong in the Field. Blind in the Back Office.
A $12.5M electrical contracting firm had a strong reputation, a growing project portfolio, and an owner who was spending significant time doing CFO work the business didn't have a CFO to do. A Financial Discovery Assessment identified $363,000 in annualized value. The more significant outcome was what the owner got to stop doing.
The Owner Was Running the Business. And Acting as the CFO. And Managing the Bank Relationship. And Reviewing Insurance.
At $12.5M in revenue, an electrical contracting business generates enough financial complexity to keep a CFO meaningfully occupied. Without one, that complexity doesn't go away — it gets absorbed by whoever is willing to carry it. In most owner-operated businesses at this size, that person is the owner.
The firm had a strong track record. The field crews were skilled and productive. The owner had built a regional reputation for quality work on commercial projects. What hadn't been built was the financial infrastructure to support the business the owner had created — or the leadership capacity to manage it without the owner in the middle of every financial decision.
Banking relationships required the owner's involvement. Insurance renewals required the owner's time. Financial reporting required the owner's review to be usable. None of this was wrong, exactly — it had worked. But it was working at a cost that was harder to see than a line on the P&L. Every hour the owner spent on financial administration was an hour not spent on estimating, client relationships, and business development — the work that only the owner could do and that drove the next phase of growth.
Meanwhile, the financial infrastructure itself had gaps. The monthly close was slow and error-prone because manual processes couldn't keep pace with project volume. Balance sheet accounts had inaccuracies that created risk with the lender. And without a cash forecast, liquidity management was reactive in a business where project cash flow is inherently lumpy.
For electrical contractors at this stage, the path forward requires getting the right person in the CFO role — and letting the owner lead the business again. That's when they called us.
The Assessment
What Was Being Managed Without a CFO — And What It Was Costing
The findings in this engagement were a mix of direct financial recovery and structural gaps that were creating risk the business didn't need to carry.
Payroll Errors in a Labor-Intensive Business
Electrical contracting is a labor-intensive business — the largest cost is the workforce, and at $12.5M with multiple project crews, manual time tracking generates errors that compound across every pay period. Overtime was tracked inconsistently. Hours were misallocated across jobs. Burden rates weren't applied systematically. Automated time tracking and payroll controls projected $214,000 in annualized savings — a number that reflects years of accumulated drift in a system without adequate oversight.
Projected Annualized Savings: $214,000
No Forward Cash View for a Project-Based Business
Electrical contracting cash flow is driven by the project portfolio — mobilization costs at the start, milestone billings that may lag field progress, retainage held to completion. Without a 13-week forecast that models the project schedule forward, cash management is reactive. For a business bidding projects that require upfront material purchases months before final billing, that lag can be costly. We built and implemented the cash forecast model as part of the engagement.
Action: 13-Week Cash Forecast Implemented
Credit Card Fees Absorbed Without Recovery
Processing fees on materials purchases, subcontractor payments, and vendor transactions were being absorbed in full with no surcharge policy or ACH payment incentive. A structured fee recovery program projected $28,500 in annual recoveries — money that had been leaving quietly with every transaction.
Annualized Recovery: $28,500
Balance Sheet Inaccuracies Creating Lender Covenant Risk
The business had a banking relationship with covenants tied to working capital and debt service ratios. AR and payroll accruals had inaccuracies that could push reported ratios outside covenant thresholds — not because the business was actually underperforming, but because the books didn't accurately reflect it. A covenant violation, even a technical one, triggers a lender review that no contractor wants. We cleaned up the balance sheet and built a covenant monitoring process to prevent surprises.
Action: Balance Sheet Cleaned Up; Covenant Monitoring Established
No Fractional CFO — Owner Carrying the Load
The most significant structural finding wasn't a number — it was a gap in leadership. The owner was managing banking relationships, reviewing insurance, overseeing financial reporting, and making CFO-level decisions without a CFO. That arrangement worked. It also cost the business in owner attention, in decisions made without dedicated financial expertise, and in the absence of anyone whose primary job was protecting the company's financial position. We placed a Fractional CFO to own these responsibilities, freeing the owner to lead the business.
Action: Fractional CFO Placed; Owner Time Returned
AP Manual Processing Delaying the Monthly Close
Paper-based AP and manual bank reconciliation were creating a close cycle that ran consistently late and introduced errors that had to be found and corrected before reports could be trusted. For a business where project-level decisions depend on current financial data, a delayed close means decisions are being made on information that's already stale. Automating AP processing brought the close timeline in line with what a $12.5M business requires.
Annualized Savings: $33,600
Is This Your Business?
If You're Running the Business and Acting as the CFO, One of Those Things Is Getting Less Than It Deserves.
A Financial Discovery Assessment finds what the CFO gap is costing your business — in dollars and in your time. Most engagements identify more value than they cost before they're finished. The owner's time is usually the largest return.
Common Questions
Financial Leadership for Electrical Contractors
When does an electrical contractor need a CFO?
The need typically emerges between $8M and $15M in revenue — when the financial complexity of multiple simultaneous projects, a sizable payroll, and banking or bonding relationships exceeds what the owner can manage alongside running the business. A key signal is when the owner is personally handling banking conversations, insurance renewals, or financial reporting review — work that should belong to a fractional CFO.
What is lender covenant compliance and why does it matter?
Lender covenants are financial conditions a borrower must maintain to stay in compliance with a loan agreement — typically ratios like minimum working capital, debt service coverage, or restrictions on additional borrowing. A covenant violation, even an unintentional one caused by inaccurate financial statements, can trigger a loan review or acceleration event. A fractional CFO monitors covenant compliance proactively and ensures the business never faces a surprise from its lender.
How much does a fractional CFO cost for an electrical contractor?
For contractors in the $10M-$20M range, fractional CFO engagements typically run between $3,000 and $8,000 per month depending on scope. Most businesses at this size identify savings and value that exceed that cost within the first 90 days — particularly when payroll efficiency, banking relationships, and compliance are addressed. A Financial Discovery Assessment establishes what the engagement should look like and what it should cost before any commitment is made.
What is job costing and why is it important for electrical contractors?
Job costing tracks the revenue and cost of each project individually, allowing the business to know which projects are profitable, which are breaking even, and which are losing money. For electrical contractors with multiple simultaneous projects at varying contract values, job costing is the foundation of project selection and pricing decisions. Without it, the business knows total margin but not where it came from — which makes improving it nearly impossible.
Related
Services and Industries
Service
Fractional CFO & Controller Services
The CFO your business needs — without the cost or commitment of a full-time hire.
Service
Financial Discovery Assessment
A diagnostic that finds what the CFO gap costs — in direct savings and in your time as an owner.
Who We Serve
GCs and Construction Contractors
We understand electrical and specialty trade contracting — project cash flow, bonding, job costing, and lender relationships.