Dispatch #15 - Cancel or Delay Equipment Shipments and Material Deliveries?

If you have not done so already, consider canceling or delaying installed equipment shipments and materials deliveries. Don’t pile supplier invoices onto your accounts payable for products that you can’t bill through to customers.

Review payment terms with customers. If your company is contractually obligated to pay suppliers for orders without first being paid by your customer, your firm has more exposure (risk). Try to renegotiate.

I understand there are other considerations such as order lead times, meeting schedules when work resumes, cancellation clauses, customer relations, and supporting your key supplier/partners. But in terms of getting through this period with enough working capital to resume work, and assuming we’re all operating ethically and in good faith, then safeguarding your company’s cash is paramount.

Need help with this or other financial matters faced by construction contractors? Let’s talk!

David Stern CFO makes every effort to provide useful and accurate information. This content, however, is not intended as a substitute for specific business-related financial advice. We disclaim all warranties and liabilities from its use.