“We need it finished before Christmas.”
That sentence can completely change the cashflow on an otherwise straightforward job.
The customer still wants the same project.
The agreed value may still be attractive.
The margin may still work.
But instead of delivering the work over eight weeks, a Sydney NSW business is suddenly being asked to finish it in five.
Another crew may be needed.
Overtime increases.
Subcontractors are brought forward.
Materials need to be ordered sooner.
Suppliers may need deposits.
Urgent freight costs more.
And despite the customer wanting the work faster, their payment terms may not have changed at all.
The business has effectively been asked to accelerate its spending without necessarily accelerating its cash receipts.
That is a working capital issue worth identifying before saying yes.
Faster delivery can mean more cash leaving each week
Consider a $180,000 commercial project.
Originally, the business planned to deliver it over eight weeks.
The labour, materials and subcontractor costs were going to be spread across those eight weeks.
Then the client asks for completion before the Christmas shutdown.
The revenue has not increased.
But the cost profile has changed.
Instead of spending $20,000 or $25,000 in an ordinary week, the business may need to spend $35,000 or $40,000 to keep the accelerated schedule moving.
The project may remain equally profitable when everything is finished.
The business simply needs access to more cash at one time.
That distinction matters.
A shorter project can require more working capital
It sounds counterintuitive.
Surely completing the job faster means getting paid faster?
Not necessarily.
The business may accelerate delivery but still invoice under the original milestone or completion terms.
Imagine the original arrangement was:
deposit at commencement
progress claim at 50 per cent completion
final invoice at completion
customer payment on 30 day terms
Compressing the project does not automatically change those payment rules.
The business may therefore have twice as much labour and supplier expenditure occurring each week while the customer’s payment process remains exactly the same.
That can make a shorter project more demanding on cash than a longer one.
The client’s deadline is not automatically your funding obligation
When a customer asks for faster delivery, the conversation usually focuses on operational capacity.
Can the work be completed?
Can staff do it?
Are the materials available?
Can subcontractors attend?
There should be another question:
What does bringing the completion date forward do to the cash required to deliver the project?
If the customer needs a materially faster outcome, it may be reasonable to discuss whether the commercial terms should also change.
That might involve a larger deposit, an additional milestone payment or payment for substantial materials before they are ordered.
Not every customer will agree.
But accepting a compressed program without reviewing the payment structure can mean the business finances the customer’s urgency itself.
Overtime can increase faster than revenue
A project brought forward may require existing employees to work longer hours rather than hiring another permanent employee.
That can be operationally efficient.
It still affects cashflow.
Overtime is generally paid through the normal payroll cycle.
The additional customer revenue may not be collected until weeks later.
If overtime adds $8,000 a week for five weeks, the business has funded another $40,000 of labour before considering superannuation and other employment costs.
Then add materials.
Subcontractors.
Freight.
Vehicles.
The impact can become much larger than the business first expected when it agreed to “just get it done before Christmas”.
Subcontractors may want their money much sooner than the client pays
Compressed projects often rely on subcontractors.
They provide additional capacity without the business permanently expanding its workforce.
But the subcontractor may invoice weekly or expect payment in seven or 14 days.
The customer might pay the principal contractor 30 days after a progress claim.
The business is carrying the gap.
If five subcontractors are brought onto the project at once, that gap can be substantial.
Before increasing subcontractor use, calculate what will become payable before the next customer receipt.
Urgent materials can change the supplier arrangement
A business may normally have plenty of time to order materials.
A shortened delivery program can remove that flexibility.
The business may need:
larger quantities immediately
express freight
stock from an alternative supplier
deposits on specialised items
payment before dispatch
multiple supplier orders at once
That can change both the cost and timing.
A supplier that normally provides favourable terms may not have enough stock.
Another supplier might have the stock but require upfront payment.
The project margin should be reviewed against the real accelerated purchasing cost, not the original estimate.
Rush freight can quietly erode the job margin
When deadlines tighten, freight is often one of the costs that changes.
The standard delivery option may no longer work.
The business pays for express delivery.
A dedicated vehicle may be required.
Air freight may replace road freight.
Multiple smaller deliveries may replace one planned shipment.
Each decision may seem reasonable because the client deadline matters.
Together, they can reduce the margin and increase the amount of cash required before payment.
If the project timetable changes substantially, the cost estimate should be revisited as well.
A variation in time can be as important as a variation in scope
Businesses are generally comfortable charging a variation if the customer changes what they want.
Additional work means additional cost.
But what about a significant change in when the customer wants it?
A compressed delivery program may increase:
overtime
subcontractor costs
freight
supplier pricing
project management time
equipment hire
labour inefficiency
The scope may technically be unchanged while the delivery cost has increased.
Where the contract and circumstances allow, the business should consider whether the accelerated timetable itself creates a legitimate commercial variation.
The customer’s urgency has a cost.
The business should understand who is carrying it.
Bringing one project forward can affect every other project
There is another problem that does not appear in the individual job budget.
Resources have to come from somewhere.
If employees are moved onto the urgent Christmas project, what happens to the other work already booked?
Does another project become delayed?
Will subcontractors be required there as well?
Will another customer invoice be pushed back?
An accelerated project can therefore affect cashflow outside the project itself.
The business may spend more delivering the urgent work while delaying the billing of another job.
That double effect can make the cash requirement greater than expected.
Map the entire business, not just the urgent contract
If a major client wants work brought forward, look at the next six to eight weeks across the whole operation.
Which other jobs are underway?
When are their invoices expected?
Which supplier accounts are due?
What payroll is coming?
Are any significant tax obligations due?
Which customers are likely to pay during that period?
The business may comfortably fund the accelerated project in isolation.
The pressure often appears when it is placed beside everything else happening at the same time.
Progress claims can help, but only when they can actually be raised
Some projects allow staged billing.
That can significantly reduce the amount of working capital the business carries.
But the milestone needs to be reached.
Documentation may need to be completed.
The claim may require approval.
A superintendent or client representative may need to sign off.
Then the payment terms begin.
When the project is accelerated, make sure the progress claim schedule still reflects the new delivery timetable.
If expenditure has been brought forward but the billing milestones have not, the business may be funding much more of the project than originally intended.
A milestone completed in December may still become January cash
Christmas introduces another timing issue.
Suppose the accelerated program gets the project finished on 12 December.
Excellent.
The invoice is raised.
The customer has 30 day terms.
That is January money.
The business may have spent heavily through November and early December to meet the customer’s Christmas deadline, yet the final payment arrives after the new year.
There is nothing unusual about that.
It is simply what the agreed payment terms create.
That is why the cashflow forecast needs to continue beyond the completion date.
What is the largest amount the business has tied up?
This can be a more useful number than the project value.
Imagine the project is worth $250,000.
At one point, the business may have:
$60,000 in materials
$45,000 in payroll already paid
$25,000 owing to subcontractors
$10,000 in freight and equipment hire
while only a $40,000 deposit has been received.
The business might temporarily have more than $100,000 of its own working capital tied up in the project.
That figure deserves attention.
The project value tells you the size of the sale.
The peak cash exposure tells you how much capacity the business needs to carry it.
Customer deposits can become more important when the program changes
A deposit negotiated for a normal delivery timeframe may no longer be appropriate after the customer requests significant acceleration.
If the business now has to commit substantially more money earlier, it may be worth discussing whether the customer can increase its upfront contribution.
For example:
A supplier deposit could be passed through.
A second payment could occur when materials are ordered.
A milestone could be brought forward.
The commercial structure should reflect the actual project where possible, not automatically remain based on the project that was originally quoted.
Supplier terms can also be revisited
The customer may have fixed payment policies.
The supplier may offer more flexibility.
A business expecting larger or earlier purchases can ask whether:
the account limit can be temporarily increased
payment can be staged
deliveries can be split
a deposit can be reduced
the balance can be extended
Even an extra week or two on a major supplier payment can materially change the peak cash requirement.
Working capital management often involves improving several small timing points rather than solving everything with one large loan.
Existing cash is useful, but do not empty the business to meet someone else’s deadline
A business may have enough cash to fund the accelerated project itself.
That is not necessarily the end of the analysis.
What remains afterwards?
Payroll still needs to be covered.
Other suppliers still need paying.
Tax obligations continue.
Another customer may have an opportunity.
Equipment may need repairs.
If the project absorbs almost all available liquidity, the business has become dependent on everything happening according to plan.
That may be more risk than the project margin justifies.
Working capital finance may be relevant before billing occurs
Where the business has to fund wages, suppliers, subcontractors and operating costs before it can issue an eligible invoice, a general working capital structure may be relevant.
Depending on the business and lender, options could include a business loan, line of credit, overdraft style facility or another commercial structure.
The key questions are:
How much is required?
When is it required?
How long is it expected to be used?
What event repays it?
A clearly defined temporary funding requirement is much easier to assess than simply asking for “more cashflow”.
Trade finance may be relevant where materials are the main pressure point
If a substantial part of the accelerated cash requirement relates to eligible supplier purchases, trade finance may also be worth investigating.
Depending on the lender and transaction, this may assist with certain domestic or overseas supplier payments.
The business should still understand the complete transaction.
Funding the materials does not automatically solve payroll, subcontractors or other costs.
But where the supplier payment is the largest early commitment, it may be an important part of the overall structure.
Debtor finance can become relevant once eligible invoices exist
Later, the business may have completed a milestone and raised a qualifying B2B invoice.
At that stage, the issue may no longer be funding the work.
It may simply be waiting for the customer to pay.
For eligible businesses, debtor or invoice finance may allow earlier access to part of the value of qualifying receivables.
Lenders may consider the customer, invoice, payment history, debtor concentration and underlying transaction.
Again, this addresses a different point in the cash cycle.
Asset purchases should not be allowed to consume the project buffer
A business trying to deliver more work may also discover it needs another ute, truck, machine or piece of equipment.
If the asset is eligible for finance, it may be worth comparing an asset finance structure with using cash.
Why?
Because the same $70,000 being considered for a vehicle might also represent several weeks of payroll and supplier commitments.
The asset could remain useful for years.
The working capital may need to support the business next week.
Separating those funding decisions can provide a clearer picture of where available cash is most valuable.
Do not forget the customer that did not ask for urgency
The accelerated Christmas job may get all the attention.
Other customers still matter.
If their work is pushed back, their invoices may also be delayed.
That can reduce expected cash receipts.
So when a customer asks for faster delivery, assess both sides:
What additional cost will this job create?
and
What revenue from other work might now arrive later?
That second question is easy to miss.
A profitable rush job can become less attractive once the full cost is known
Suppose the original expected margin was $45,000.
Then acceleration adds:
$8,000 overtime.
$6,000 extra subcontractor costs.
$4,000 urgent freight.
$3,000 additional equipment hire.
The job may still be worthwhile.
But it is now a different commercial proposition.
The cash requirement has increased and the margin has decreased.
Knowing that before agreeing to the new deadline gives the business a chance to renegotiate rather than absorbing the entire change.
Test the project with the final payment moved into January
This is one of the more useful late September exercises.
Take the accelerated project.
Assume the business spends what is expected.
Then move the final customer receipt into January.
What happens?
Can payroll still be covered?
Can suppliers be paid?
Can the business start the next project?
Is sufficient cash left for tax and existing commitments?
If the answer is yes, the business has some breathing room.
If the model immediately becomes tight, the project may need a different payment or funding structure before the deadline is agreed.
The customer’s urgency should not create the business’s emergency
That is really the point.
A good customer may have a legitimate reason for wanting work completed before Christmas.
The business may genuinely want to help.
But the faster timeframe should be costed operationally and financially.
The business should understand what extra cash is required, how long it will be tied up and whether the customer terms still make sense.
A December deadline can be an opportunity.
It does not need to become a January cashflow problem.
Five questions Sydney businesses should ask before agreeing to a Christmas deadline
Can we charge more if the customer wants the work completed sooner?
That depends on the contract and circumstances. Where acceleration creates genuine additional labour, freight, subcontractor or operating costs, the business should review whether those costs can be reflected commercially.
Should we ask for another payment before bringing the project forward?
Where appropriate, an additional deposit or milestone payment may reduce the amount the business has to fund itself.
Can finance help us cover payroll and subcontractors during an accelerated project?
Potentially. Depending on the lender and business, working capital finance may be considered for eligible operating costs associated with delivering the work.
What if the final invoice will not be paid until January?
That should be included in the cashflow forecast before the accelerated timetable is accepted. For eligible B2B invoices, debtor finance may also be worth investigating later in the cycle.
Is late September too early to have this conversation?
No. If customers are already discussing work they want completed before the Christmas shutdown, this is when the payment structure, resources and funding requirement can still be reviewed before commitments are locked in.
Faster delivery should not mean slower cashflow thinking
For Sydney NSW businesses, end-of-year deadlines can bring valuable work.
Clients want projects finished.
Commercial customers want products delivered.
Businesses want outstanding jobs cleared before the break.
The operational question is whether the work can be completed.
The financial question is whether the business can carry the compressed cost of delivering it.
Thrive Broking can help businesses review that timing and compare relevant working capital, trade finance, debtor finance, asset finance and other commercial funding options across our lender panel where appropriate.
The client may want the project faster.
That does not mean the business should agree to fund every extra week of wages, suppliers and subcontractors without first understanding what the request actually costs.
A Broker’s Observation
When a client says, “Can you bring it forward by three weeks?”, I would treat that as more than a scheduling question.
I would want the business to recost the job.
What happens to payroll?
Are subcontractors now needed?
Do materials require urgent freight?
Does another project get pushed back?
When can the next progress claim be raised?
When does the final customer money actually arrive?
The project might still be a very good job.
But it is no longer the same job that was originally quoted.
If the timeframe changes the cash requirement, the financial structure deserves to change with it.