Roofing Cash Flow Guide

The Two Cash Flow Problems Unique to Roofing

Roofing contractors face two distinct cash flow challenges that most other contractors don't:

Problem 1 — The Insurance Delay Gap: You complete work, submit to insurance, and wait 30–90 days for the final RCV check. During that wait, you've already spent money on materials and crew. For a company with 30 simultaneous storm jobs, this creates $300,000–$600,000 in outstanding expenses before checks close.

Problem 2 — The Storm Season Feast/Famine Cycle: When a storm hits, you may have more work than you can handle. 6 months later, in December, you may have almost no work. Revenue can swing from $120,000/month to $12,000/month for the same company in the same year.

Managing the Insurance Payment Timeline

Here's a realistic cash flow map for a roofing contractor in the middle of a 20-job storm pipeline:

The critical observation: at Week 5–6, you've spent $135,000 and recovered $28,000 — a $107,000 cash deficit at your lowest point, with $180,000+ in confirmed receivables ahead of you. This is exactly the MCA gap: confirmed future revenue, immediate cash need.

Key Timing Rules

• Request ACV payments immediately — As soon as the adjuster approves, request the ACV check. It arrives faster than waiting for the full RCV settlement.
• Stage materials purchases to match ACV check timing — Don't buy materials for Week 5 jobs in Week 2. Stagger purchases as checks arrive to reduce your peak cash deficit.
• Use supplement negotiations to control timing — Supplement approvals often take 30–60 days. Submitting supplements immediately after job completion reduces your receivable wait time.

Storm Season Cash Management

When a storm event creates a 30–50 job pipeline, your most important cash flow decisions happen in the first 2 weeks:

1. Set a materials budget per job — Know your average material cost per square. Multiply by your signed job count. This is your total materials exposure over the next 6–8 weeks.
2. Calculate your maximum cash deficit — At peak spending, before the first wave of ACV checks, what is your maximum negative cash position? This is your MCA advance target.
3. Apply for MCA at week 4–6 — When 1–2 months of post-storm deposits are showing in your statements, apply. You'll get the best terms and have the clearest picture of advance need.
4. Maintain a separate "MCA repayment buffer" — As insurance checks arrive, set aside enough to cover the daily ACH before letting the rest flow to operations. Daily payments must always be covered first.

Building the Off-Season Reserve

The goal: arrive at December 1st with enough cash on hand to fund January–March at full operations without external capital.

The Off-Season Reserve Formula

Monthly overhead × 3 months + any MCA payments still running = off-season reserve target

Example: $18,000/month overhead × 3 months = $54,000 base. If you have an MCA with $400/day payment running, add $400 × 65 business days = $26,000. Total reserve target: $80,000.

Build this reserve during your storm season peak — specifically the months when large insurance checks are arriving. Set a rule: 20% of every insurance check over $5,000 goes to the off-season reserve account, not the operating account.

The MCA Capital Cycle for Roofing