Cash Flow on Public Jobs: From SOV to Pay Apps

You can win the job, run a clean site, and still go broke if your cash flow is upside down. Public contracts don’t pay fast, and retainage eats into margins. The secret is building your payment strategy before work even begins.

1. Build a Smart Schedule of Values (SOV)

The SOV is how you get paid. Don’t load all your profit at the end of the job you may never see it if delays happen. Spread your values so you’re covering real-time labor, materials, and overhead.

2. Know the Pay App Cycle

Every agency has a rhythm: cut-off dates, inspection requirements, approval chains. Submit late, or with missing signatures, and you’ve just added 30 days to your wait.

3. Retainage Is Real

Most municipalities hold back 5–10% until final completion. Plan for that cash gap upfront. It’s not profit it’s hostage money until you close out clean.

4. Change Orders = Cash Bridge

Approved change orders are lifelines. Push to price and submit them quickly waiting until the end means you’re funding the project out of pocket.

Cash flow is the oxygen of your project. Build the SOV wisely, respect the pay app cycle, and treat retainage as locked savings. The firms that last aren’t the ones with the biggest jobs they’re the ones that stay liquid.