Fractional CFO or Controller for a Growing Commercial GC?

Commercial construction revenue is recognized as work is performed, not as invoices are paid, using percentage-of-completion accounting tied to cost incurred against total estimated cost. Get this wrong and your P&L either front-loads profit on jobs that are only partly done or hides losses on a job running over budget until it's too late to fix.

This column is pure controller work: pulling actual cost from job cost reports, comparing it to the original estimate, and recalculating percent complete every period. A fractional CFO shouldn't be doing this by hand, but also can't build a company-level forecast without it being current.

When billed-to-date is less than earned revenue, you're underbilled, financing the job out of your own cash instead of the owner's. A handful of underbilled jobs running at once is one of the most common reasons a profitable-on-paper GC runs into a cash crunch, since the P&L can show healthy earned revenue while the bank account tells a completely different story. This column needs to be reviewed at least monthly, ideally by job, and it's exactly the kind of number a controller should be flagging before it becomes a CFO-level cash emergency.

For example, retainage typically holds back 5 to 10 percent of each payment until substantial completion, and it's real cash owed to you that sits outside normal AR aging. If retainage isn't tracked separately by job, it gets lost in general receivables and forgotten until someone notices it's overdue by months. Lien waivers, both the ones you issue to subs and the ones you collect from them, need to be tracked against each payment application, since a missing waiver can hold up your own payment from the owner. This is detailed, job-by-job bookkeeping, not strategic finance work.

Say you're bidding a $6 million job on top of $14 million in current backlog. Your surety will look at working capital, net worth, and completed-job history before extending bonding capacity for the new job, and a controller with clean, current financials is what makes that conversation fast instead of a scramble. A fractional CFO's role here is managing the relationship and the growth plan, deciding how much backlog to pursue relative to current bonding capacity, but that conversation is only useful once the underlying financials are trustworthy.

Once percentage-of-completion, underbilling, retainage, and bonding capacity are all current and accurate, a fractional CFO can do the job that actually needs strategic judgment: deciding which jobs to bid, modeling cash flow across a backlog with jobs at different completion stages, and setting a pace for growth the balance sheet can actually support. A controller who can run this worksheet accurately is a real hire: general operations managers, the closest national wage comparison for this kind of role, earn a median of $105,770 a year¹, and a construction-savvy controller commands comparable pay, which is worth budgeting for realistically rather than expecting a generalist bookkeeper to absorb job-cost accounting on top of everything else.

Every active job on the weekly worksheet should show these items:

• Contract value and percentage complete, based on cost incurred against total estimated cost.
• Billed-to-date against earned revenue, so underbilled jobs financed out of your own cash are visible right away.
• Retainage held back on each job, tracked separately from normal receivables so it is not forgotten.
• Lien waiver status by job, along with current financials that support a fast conversation about bonding capacity.

A GC that trusts its own job cost worksheet can bid more aggressively with confidence, because the cost of being wrong on a single job is visible early instead of discovered at closeout. It can also negotiate financing, whether that's a working capital line or equipment financing, from a position of strength, since lenders and sureties both respond well to financials that are current and internally consistent rather than reconstructed at year-end.

The fractional CFO's ongoing job at that point is less about firefighting and more about pacing: how many jobs to carry at once given current crew and PM capacity, and when backlog growth is starting to outrun the company's ability to execute well, which is a harder problem to see coming than a single job running over budget and just as capable of sinking a strong year if it goes unnoticed for two or three quarters running.