March in Iowa means one thing for contractors: The spring rush is coming.

In exactly 4-6 weeks, you'll go from managing 2 small projects to juggling 8-12 simultaneous jobs. Your phone will ring constantly with new bid requests. Material suppliers will call for payment. Employees will expect paychecks. And your bank account will look... empty.

Because here's the brutal truth about construction cash flow: Spring is when you make your money, but it's also when you run out of it.

Most Des Moines contractors spend January and February recovering from the slow winter season—and then March hits and they realize they're completely unprepared for the cash flow demands of spring.

The result?

• Passing on profitable projects because you can't afford materials deposits
• Paying suppliers late (damaging relationships and credit terms)
• Missing payroll (or scrambling to cover it from personal funds)
• Taking on bad projects just for the deposit money
• Turning down growth opportunities because cash is too tight

But what if March was different this year?

What if you entered spring construction season with a clear cash flow plan, adequate working capital, optimized tax strategies, and systems that prevented the annual cash crunch instead of just surviving it?

This article shows you exactly how to prepare your Iowa construction business for spring season cash flow—before the crisis hits.

Understanding Iowa's Seasonal Construction Cash Flow Pattern

Iowa contractors face a unique cash flow pattern:

January-February (Winter Low):

• Revenue: 10-15% of annual
• Expenses: 70-80% of normal (payroll, overhead continue)
• Cash position: Depleted from covering winter losses

March (The Pivot):

• Revenue: Starts increasing (15-20% of annual)
• Expenses: Spike dramatically (hiring, equipment prep, materials deposits)
• Cash position: Most critical month—often the breaking point

April-May (Spring Ramp-Up):

• Revenue: 30-35% of annual
• Expenses: Peak levels (full crews, multiple projects, heavy materials)
• Cash position: Stretched thin despite growing revenue

June-August (Peak Season):

• Revenue: 35-40% of annual
• Expenses: High but stabilized
• Cash position: Finally improving as receivables catch up

September-October (Fall Wind-Down):

• Revenue: 15-20% of annual
• Expenses: Declining
• Cash position: Best cash position of the year

November-December (Winter Prep):

• Revenue: 5-10% of annual
• Expenses: Declining but still significant
• Cash position: Spending down to survive winter

The Problem: Most contractors focus on the revenue curve and ignore the cash flow curve. Revenue peaks in June-August, but cash flow crisis happens in March-May when expenses spike before receivables catch up.

March Cash Flow Mistake #1: Underestimating Spring Startup Costs

You know spring is coming. But do you know what it costs to restart operations?

The Hidden Spring Startup Expenses

Equipment Maintenance and Repairs:

• Annual truck maintenance: $1,200-2,500 per vehicle
• Equipment servicing: $3,000-8,000
• Tool replacement: $1,500-3,000
• Safety equipment updates: $800-1,500

Rehiring and Training:

• Recruiting costs: $500-1,200 per new hire
• Drug testing and background checks: $150-300 per hire
• Safety training: $200-400 per employee
• Certifications and licenses: $300-800 per employee

Materials and Supplies:

• Initial inventory stock: $15,000-50,000
• Supplier deposits (reopening accounts): $5,000-15,000
• Small tools and consumables: $2,000-5,000

Insurance and Bonding:

• Annual insurance renewals (often due in March): $8,000-25,000
• Bond renewals: $2,000-8,000
• Increased coverage for larger projects: $3,000-10,000

Permits and Licenses:

• Business license renewals: $200-500
• Contractor license renewals: $150-400
• Vehicle registrations: $300-800
• Equipment permits: $200-600

Real Example: West Des Moines Remodeling Contractor

February 28 Cash Position: $18,000

March Spring Startup Expenses:

• Truck maintenance (3 trucks): $4,200
• Equipment servicing: $5,600
• Rehire 4 seasonal workers: $3,200 (recruiting, testing, training)
• Supplier deposits: $8,500
• Insurance renewal: $14,200
• Tools and supplies: $3,800
• Licenses and permits: $900
• Total March expenses: $40,400

March Revenue (slow month): $28,000
March Cash Deficit: -$12,400

Result: Had to use personal credit card for payroll, paid suppliers late, couldn't bid on two profitable April projects due to lack of deposit money.

The March Planning Solution:

By February 15, create detailed spring startup budget:

1. List EVERY expense coming in March-April
2. Calculate exact cash needed to cover startup period
3. Identify funding sources (line of credit, savings, early customer deposits)
4. Reserve cash in January-February instead of spending it all

If this contractor had planned:

• Reserved $25,000 from January work specifically for March expenses
• Secured $15,000 line of credit in February (before needed)
• Negotiated 30-day terms with two major suppliers
• Result: Covered all expenses, bid on profitable projects, avoided credit card debt

Learn about contractor cash flow planning.

March Cash Flow Mistake #2: Poor Progress Billing Timing

Construction projects take 2-8 weeks. But your expenses are immediate.

The Progress Billing Cash Flow Trap

Typical contractor billing mistake:

Week 1: Start $85,000 project

• Materials purchased: $28,000 (due in 30 days)
• Labor week 1: $8,500 (due Friday)
• Total expenses: $36,500
• Money received: $0

Week 2-3: Continue work

• Materials: $15,000
• Labor: $17,000
• Total expenses: $32,000
• Money received: $0

Week 4: Submit first progress invoice

• Invoice amount: $42,000 (50% completion)
• Expenses to date: $68,500
• Money received: $0

Week 5-6: Wait for payment

• Additional expenses: $25,000
• Total expenses: $93,500
• Money received: $0

Week 7: Finally receive payment

• Money received: $42,000
• You're still $51,500 out of pocket

Week 8-10: Complete project, submit final invoice

• Final expenses: $16,500
• Total expenses: $110,000
• Money received: $42,000

Week 11-12: Wait for final payment

• Money received from project to date: $42,000
• Still owed: $43,000
• Your cash is tied up for 12 weeks

The March Solution: Front-Loaded Payment Terms

Negotiate payment terms that match your cash flow needs:

Option 1: Larger Deposit

• 30% deposit at signing ($25,500)
• Progress payments every 2 weeks
• Reduces your out-of-pocket to manageable levels

Option 2: Weekly Progress Billing

• Bill weekly instead of waiting for completion milestones
• Faster cash conversion
• Customer pays as work progresses

Option 3: Material-Plus Billing

• Bill for materials immediately upon delivery
• Separate material invoices from labor invoices
• Reduces material cash outlay

Option 4: Require Deposits for Spring Projects

Ankeny contractor implemented new spring contract terms:

Previous terms:

• 10% deposit
• Progress billing at 50% and 100% completion
• Net 30 payment terms

New spring terms:

• 35% deposit
• Progress billing every two weeks
• Net 15 payment terms
• 1.5% monthly interest on late payments

Result:

• Average cash out-of-pocket reduced from $68,000 to $22,000 per project
• Could run 3 simultaneous projects instead of 1
• Spring revenue increased 180%
• Eliminated late supplier payments

The key: March is when you set terms for spring projects. Don't wait until you're already drowning in negative cash flow.

March Cash Flow Mistake #3: Wrong Financing Strategy

Most contractors use the wrong financing tools at the wrong times.

Common Financing Mistakes

Mistake 3A: Business Credit Card for Materials

Why it seems smart:

• Easy access to funds
• Rewards points
• No application process

Why it's terrible for spring construction:

• High interest rates (18-24%)
• Low limits ($15,000-35,000 max)
• Ruins personal credit utilization
• Can't scale with growth

Better option: Supplier trade credit

Negotiate with suppliers in February:

• Request 45-60 day payment terms
• Commit to annual volume targets
• Request higher credit limits
• Establish automatic payments to maintain good standing

Result: $50,000-150,000 in effective financing at 0% interest

Mistake 3B: Equipment Loans for Cash Flow

The trap:

• Need cash for payroll
• Take equipment loan or lease
• Use money for operations (not equipment)
• Now stuck with equipment payment + original cash problem

Why it fails:

• Equipment loans are 3-5 year commitments
• Monthly payments strain cash flow permanently
• Doesn't solve root problem (timing mismatch)

Better option: Operating line of credit

Established in February (before you need it):

• $50,000-150,000 limit
• Draw when needed, repay when able
• Interest only on amount used
• Flexible for seasonal patterns

Mistake 3C: Factoring Receivables (Desperation Move)

How it works:

• Sell your invoices to factoring company
• Receive 70-90% immediately
• They collect from customer
• You pay 2-5% fee

When it makes sense:

• Emergency cash crisis
• Customer with excellent credit
• One-time need

Why it's usually bad:

• Expensive (2-5% per invoice = 24-60% annualized)
• Signals financial distress to customers
• Can damage customer relationships
• Doesn't fix underlying cash flow problems

Better option: Fix your billing and collection processes

Johnston contractor was considering factoring. We analyzed his situation:

Problem identified:

• Average collection time: 68 days
• Industry standard: 35 days
• Cash tied up unnecessarily: $185,000

Solutions implemented:

• Deposit increases (10% to 30%)
• Progress billing every 2 weeks (instead of monthly)
• Automated payment reminders
• Credit card payment option (2.5% fee)
• 1.5% monthly interest on overdue invoices

Result:

• Average collection time: 31 days
• Freed up $140,000 in cash
• Avoided factoring costs: $7,000+/year
• Improved customer payment behavior

The Right Financing Strategy

March financing hierarchy:

Tier 1 (Best): Internal Sources

• Cash reserves built during profitable fall season
• Owner capital injection
• Retained earnings

Tier 2 (Good): No-Cost External

• Supplier trade credit
• Customer deposits
• Progress billing optimization

Tier 3 (Acceptable): Low-Cost Financing

• Bank line of credit (prime + 2-3%)
• SBA working capital loans
• Equipment financing (only for actual equipment needs)

Tier 4 (Emergency Only): Expensive Options

• Business credit cards
• Merchant cash advances
• Factoring
• Personal loans

The March action: Establish Tier 2 and Tier 3 financing in February, before you need it. Never wait until crisis to seek financing—you'll get terrible terms.

March Cash Flow Mistake #4: No Cash Flow Forecast

Most contractors manage cash flow by checking their bank balance each morning.

That's not management. That's panic.

The 90-Day Rolling Cash Flow Forecast

What it is:A week-by-week projection of cash in and cash out for the next 90 days.

What it does:Shows you EXACTLY when cash crunches will occur—with enough time to prevent them.

How to build it:

Step 1: Project Revenue (Cash In)

List every project:

• Project name
• Contract amount
• Progress billing schedule
• Expected payment dates
• Payment probability (adjust for slow-paying customers)

Example:

Week of March 15:

• ABC Remodeling - Progress Invoice #2: $22,000 (expected)
• XYZ Addition - Final payment: $18,500 (expected)
• Smith Renovation - Progress Invoice #1: $31,000 (expected)
• Total expected cash in: $71,500

Step 2: Project Expenses (Cash Out)

List every expense category:

• Payroll (weekly)
• Materials (by project)
• Equipment payments
• Insurance
• Rent/mortgage
• Utilities
• Subcontractors
• Taxes (quarterly estimated, annual property, etc.)

Example:

Week of March 15:

• Payroll (6 employees): $18,200
• Materials - ABC project: $8,500
• Materials - Smith project: $12,800
• Equipment lease: $2,400
• Subcontractor - XYZ: $6,200
• Quarterly estimated taxes: $8,500
• Insurance: $0
• Total expected cash out: $56,600

Step 3: Calculate Net Cash Flow

Week of March 15:

• Cash in: $71,500
• Cash out: $56,600
• Net: +$14,900

Step 4: Add Beginning Balance

Beginning balance (March 15): $22,000
Net cash flow: +$14,900
Ending balance (March 22): $36,900

Step 5: Repeat for 13 Weeks

Project every week through June to identify:

• Weeks with negative cash flow
• Cumulative impact of multiple negative weeks
• Maximum cash need

‍

Cash Flow Forecast Tools

Option 1: Spreadsheet (Free)

• Build custom forecast in Excel or Google Sheets
• Update weekly
• Simple and flexible

Option 2: QuickBooks Cash Flow Forecast

• Built into QuickBooks
• Pulls from your existing data
• Automated but less flexible

Option 3: Dedicated Cash Flow Software

• Float, Dryrun, Pulse
• Advanced features
• $50-200/month
• Overkill for most small contractors

Our recommendation: Start with spreadsheet. If you're consistently managing $2M+ annual revenue, upgrade to dedicated software.

Get cash flow forecasting templates.

March Cash Flow Mistake #5: Wrong Tax Payment Timing

Quarterly estimated tax payments are due:

• April 15
• June 15
• September 15
• January 15

The March problem: Your April 15 payment is due right when spring expenses are highest.

The Tax Payment Cash Flow Strategy

Bad approach:

• Ignore taxes all quarter
• April 10: Realize you owe $18,500
• Scramble to pay, killing spring cash flow

Better approach:

• Calculate Q1 estimated taxes in January
• Set aside weekly into separate account
• Pay on time without cash flow shock

Best approach:

• Use annualized income method
• Adjust payments based on actual seasonal income
• Pay larger amounts in fall (when cash is good)
• Pay smaller amounts in spring (when cash is tight)

Example:

Traditional method (Equal quarterly payments):

• Annual tax estimate: $72,000
• Quarterly payment: $18,000
• Due: April 15, June 15, Sept 15, Jan 15

Annualized income method:

• Q1 income (low): $65,000 → Tax payment: $8,500
• Q2 income (medium): $195,000 → Tax payment: $14,500
• Q3 income (high): $245,000 → Tax payment: $28,000
• Q4 income (low): $95,000 → Tax payment: $21,000

April 15 payment:

• Traditional: $18,000 (cash flow killer)
• Annualized: $8,500 (manageable)
• Cash flow improvement: $9,500

The catch: Must calculate correctly or face penalties. This is where having a construction-specialized CPA pays for itself.

The March 15 S-Corp Return Advantage

If you're an S-Corporation, your return is due March 15 (not April 15).

Strategic advantage:

• File by March 15
• Know exact 2025 tax liability
• Adjust April 15 estimated payment accordingly
• Avoid overpaying and underpaying

Example:

West Des Moines contractor filed March 10:

2025 final tax liability: $68,200
Estimated quarterly payments for 2026: $17,050 each

But: Projecting slower Q1 and Q2 2026 due to project delays

Adjustment:

• Q1 payment (April 15): $10,000 (reduced)
• Q2 payment (June 15): $12,000 (reduced)
• Q3 payment (Sept 15): $25,000 (increased)
• Q4 payment (Jan 15): $21,200 (increased)

Cash flow benefit:

• Preserved $12,000 in April-June
• Used for spring materials and payroll
• Repaid through higher fall payments
• Zero penalties (annualized method covers it)

The lesson: File early, plan strategically, preserve spring cash flow.

Learn about S-Corp tax strategies.

March Cash Flow Mistake #6: No Emergency Cash Reserve

Murphy's Law of Construction Cash Flow:

Whatever can go wrong WILL go wrong in March-May:

• Customer doesn't pay on time
• Equipment breaks down
• Material prices spike
• Weather delays push revenue out
• Unexpected tax bill
• Vehicle accident
• Employee injury

One unexpected $15,000 expense destroys your entire spring season.

The 2-Month Operating Reserve Strategy

Target: 2 months of operating expenses in liquid reserve

For most contractors: $40,000-$120,000

How to build it:

September-December (Peak cash position):

• Set aside 10-15% of monthly profit
• Accumulate in separate savings account
• Do not touch except for true emergencies

January-February (Pre-spring):

• Resist temptation to spend reserve
• Maintain discipline even when cash is tight
• This reserve is for spring survival

March-May (Spring season):

• Draw from reserve only when necessary
• Track all draws
• Prioritize repayment once cash flow improves

June-August (Peak revenue):

• Replenish reserve to target level
• Rebuild for next winter/spring cycle

Real Example: Emergency Reserve Success Story

Ankeny HVAC contractor built $65,000 emergency reserve in fall 2025.

April 15, 2026:

• $42,000 invoice not paid (customer filed bankruptcy)
• April 18 payroll due: $18,500
• Material deliveries: $22,000
• Total cash needed: $40,500
• Bank balance: $8,200

Without reserve: Would have missed payroll, damaged supplier relationships, lost crew

With reserve:

• Drew $35,000 from reserve
• Covered all obligations
• Pursued collection from bankrupt customer
• Rebuilt reserve by July

Cost of emergency: $0 (eventually recovered most of receivable)

Cost without reserve: Would have been catastrophic

The lesson: Emergency reserves aren't optional. They're the difference between surviving and failing when spring goes wrong.

The March Cash Flow Preparation Checklist

Complete by March 15:

Week 1 (March 1-7): Financial Assessment

✅ Review January-February actual results vs. budget
✅ Calculate current cash position
✅ Identify all debt obligations and due dates
✅ Review line of credit status (available, expiring?)
✅ Calculate emergency reserve balance

Week 2 (March 8-14): Spring Planning

✅ Build 90-day cash flow forecast (March-May)
✅ Identify cash shortage weeks
✅ Calculate maximum cash need
✅ List all spring startup expenses
✅ Review all insurance and bond renewals

Week 3 (March 15-21): Financing and Terms

✅ Negotiate supplier terms (60-day payment if possible)
✅ Secure or increase line of credit if needed
✅ Update contract terms for spring projects
✅ Require larger deposits (30%+ minimum)
✅ Implement weekly or bi-weekly progress billing

Week 4 (March 22-31): Tax and Systems

✅ File S-Corp return (due March 15) or extension
✅ Calculate Q1 estimated tax payment
✅ Adjust quarterly payments using annualized method
✅ Set up weekly cash flow monitoring
✅ Establish cash reserve draw/repayment policy

Ongoing (April-May): Execution

✅ Update cash flow forecast weekly
✅ Monitor actual vs. forecast
✅ Adjust plans when reality differs from forecast
✅ Maintain supplier communication
✅ Enforce payment terms strictly (no "I'll pay next week")

The Performance Financial Spring Cash Flow Service

Most Des Moines contractors handle cash flow reactively—fighting fires as they happen.

We help you manage cash flow proactively—preventing fires before they start.

Our Spring Cash Flow Management Service

Monthly Planning Sessions (January-May):

• Review prior month actuals
• Update 90-day rolling forecast
• Identify upcoming cash crunches
• Develop mitigation strategies
• Adjust tax planning

Weekly Cash Flow Monitoring:

• Compare actual cash position to forecast
• Alert to variances requiring action
• Coordinate timing of major expenses
• Manage line of credit draws/repayments

Crisis Prevention:

• Identify problems 4-6 weeks before they hit
• Negotiate with suppliers before cash is short
• Adjust project scheduling to smooth cash flow
• Coordinate customer payments to match expense timing

Tax Integration:

• Minimize spring tax payments (legally)
• Maximize fall tax payments (when cash is good)
• Coordinate estimated payments with cash flow
• Ensure zero penalties despite unequal payments

The difference: Contractors working with us enter spring prepared—with cash reserves, financing in place, forecasts built, and plans ready to execute.

Contractors without specialized help enter spring hoping everything works out—and scrambling when it doesn't.

Our construction accounting services extend throughout the Des Moines metro including West Des Moines, Ankeny, Johnston, Clive, and Grimes.

Learn from successful contractors like Des Moines Premier Builders, Iowa Seasonal Contractors, Spring Construction Services, Metro Cash Flow Solutions, and Midwest Builder Finance who prepare strategically for spring season cash flow challenges.

Don't wait until payroll bounces to think about cash flow. Prepare now while you still have time.

Schedule your spring cash flow planning session today →

‍