The Customer Signed. Reprice the Cash Exposure Before Work Starts

A typical situation looks like this.

A contractor has an $84,000 job ready to start. The customer signed the agreement and paid a 20% deposit. The crew has an opening next week, so the owner wants to order materials today.

Then the supplier updates the quote: materials will cost $2,400 more than the estimate, and freight is up another $900. The owner looks at the signed customer price and says, “We already sold the job. We have to get moving.”

The job may still be worth doing. The contract and customer relationship may limit what the owner can change. Those questions belong with the people qualified to answer them.

The advisor has a different job. Before the purchase orders go out, show how the new costs change the cash needed to reach the next customer payment.

This is an explicitly framed composite. The contractor, dialogue, contract amount, deposit, quotes, payroll, schedule, payment terms, and every company-level number are instructional.

A signed sale tells you what the customer agreed to pay. It does not tell you whether the business can carry the work from deposit to collection.

One monthly jump can expose an old estimate

The Bureau of Labor Statistics diesel series supports the timely concern. In its September 10 Producer Price Index release, BLS reported that producer prices for diesel fuel rose 24.1% in August. Prices for truck transportation of freight rose 2.0%.

The broad final-demand index increased 0.4% for the month and 5.4% over the year. BLS also noted that some April through July figures were revised because late reports and corrections arrived.

Those numbers describe price movement across the economy, not proof that one contractor’s delivery charge should rise 2% or that a supplier’s quote should move with diesel. The PPI measures selling prices received by domestic producers. It gives the advisor a reason to reopen the estimate, but a current written quote still controls the company calculation.

The obvious response is to talk about raising prices, but this customer has already signed. The immediate decision is how much cash the company must put into the job before another customer receipt arrives.

Rebuild the cost-to-next-collection number

Start with the latest documents, not the estimate saved when the proposal went out. Pull the signed agreement, customer payment schedule, supplier quotes, freight terms, crew schedule, and expected payroll dates.

In the composite, the company has collected a $16,800 deposit. The original plan showed $31,000 of materials, $4,000 of freight, and $7,500 of direct payroll before the next progress payment, for $42,500 leaving before the next receipt. After applying the deposit, the company expected to carry $25,700.

The revised written quotes change materials to $33,400 and freight to $4,900. Payroll is still $7,500. The cash needed before the progress payment is now $45,800, leaving a $29,000 gap after the deposit.

The increase is $3,300. That amount reduces the job’s expected margin, but the timing deserves equal attention. If the supplier and carrier require payment next week while the progress invoice cannot be issued for a month, the company must carry the whole change during that gap.

Do not apply the BLS percentages to the estimate. Replace old amounts with the company’s current written amounts. Mark how long each quote remains valid, when every payment is due, and which customer milestone allows the next invoice.

Then ask: “What has to happen before we can bill the next $25,200?”

That question moves the meeting from a national price report to the work the business controls.

Find the part of the job that can still move

A higher cost does not leave the owner with only one choice. The available moves depend on the agreement, supplier terms, customer expectations, and the work itself.

The owner may be able to lock the supplier quote now, change the purchase sequence, confirm an approved material substitute, negotiate freight timing, or ask whether the next customer payment can be tied to an earlier completed milestone. Any contract, scope, or customer-price change needs proper review before the owner acts.

The advisor should model only the options the business can actually use. Put each supplier payment, freight charge, and payroll draft into the 13-week cash forecast. Put customer receipts on dates supported by the agreement and normal collection history.

Now inspect the lowest cash week: does the $3,300 change push the business below its operating floor? Does an earlier purchase protect the quote but create a cash problem before payroll? Would splitting the order cost more overall but keep enough cash available to finish this job and the others already in progress?

This is where the cash-flow view earns its place. The job can remain profitable and still create a dangerous week, or show a smaller margin while remaining easy for the company to carry. The owner needs both answers before committing more cash.

Keep the next estimate from going stale

The current job needs a decision. It should also leave a better estimating rule behind.

After the job is complete, compare the estimate, purchase orders, freight invoices, payroll, billing milestones, and actual collection dates. Record which assumption moved and how long the business carried the difference.

Use that lesson on the next proposal. A company can shorten the quote window, obtain firmer vendor pricing, change deposit timing, or build a documented adjustment process with qualified contract help. The right move will depend on the work and the customer.

Measure the result after the cash is collected: did the revised purchase plan protect the cash floor? Did the billing milestone happen on time? Did the final job produce the cash the owner expected?

The point is to keep one cost surprise from becoming a permanent estimating habit.

Go back to the signed job

The owner in the opening still has to decide whether to release the purchase orders today. The answer now includes the revised $29,000 cash gap, the date of the next supported receipt, and the lowest cash week for the rest of the business.

A signed price closes the sale. It does not close the cash calculation.

Clear Path To Cash Advisor helps advisors keep the issue, current source documents, available actions, dated cash effects, and follow-up measure in one working record. The advisor still verifies the inputs and helps the owner make the call.