For general contractors
A sub who cannot keep books becomes your schedule problem
When a subcontractor goes sideways mid-job it lands on you: your schedule, your margin, sometimes your bond. Usually it was a bookkeeping problem months before it was a field problem, and by then the only options left are expensive ones.
You already prequalify subs and you already read their financials, so you already know which ones come back short. What has been missing is anywhere to send them.
What it costs you
What a sub with bad books costs you, specifically
None of this is about whether he can build. It is about whether the paperwork behind him can keep up with the job, and every one of these lands on your side of the line rather than his.
Your bid list shrinks to whoever has their paperwork together
A sub who cannot produce financials or a work-in-progress schedule cannot clear prequalification, whatever his crews can do. You end up choosing from who can pass the packet rather than who is best for the scope.
A sub who fails mid-job becomes your replacement cost
Your schedule, the premium you pay to bring someone in mid-scope, and the delay you carry downstream. His insolvency is his problem for about a week and yours for the rest of the job.
His billing decides when you get paid
Pay applications that arrive wrong or late stall your own draw, because your billing is assembled from theirs. One sub who cannot tie a G702 to the schedule of values can hold up a whole month.
His lapsed paperwork is your compliance gap
An expired insurance certificate or a missing lien waiver on the sub side does not stay on the sub side. It becomes your exposure on the project, and unreleased waivers can cloud title.
He discovers the loss at closeout, and you absorb the fight
A sub who cannot tell what a job is costing him finds out when it closes. A sub who finds out mid-project brings you a change order argument you either absorb or litigate.
Where you need bonded subs, his statements decide it
A surety writes against financial statements. If his cannot support the bond your project requires, the constraint is his bookkeeping rather than his capability, and it is your job that goes unbid.
What happens to the sub
What we actually do with a contractor you send us
The same work we run for any commercial contractor, aimed at the things that were failing your prequal packet.
Books structured for job reporting, and a close that closes
Most inherited contractor books were built to produce a tax return. The chart of accounts gets rebuilt for job-level reporting, and the month actually closes on a calendar.
G702 and G703 that tie to the schedule of values
Pay applications built from the same numbers the books hold, in the format you expect, so they stop coming back to him and stop holding up your draw.
Retainage tracked by contract, and change orders logged
Aged by contract rather than buried in receivables. Work performed against an unapproved change order exists as a tracked position from the day it happens rather than as a memory.
Certified payroll when he picks up public work
WH-347 and the state equivalents, with prevailing wage tracked by trade and locality. It arrives the first time he takes a public job, usually with no warning.
A WIP schedule and statements that survive a packet
The document your prequal asks for, and the one a surety reads if the job needs him bonded. Produced monthly rather than reconstructed when somebody asks.
The detail sits on the commercial pages rather than here: /commercial/subcontractors is written to him, and /commercial/compliance covers the documentation side.
Why refer
A sub who cannot produce financials is a sub you cannot prequal
This is the honest version and it is not a favour to us. A sub who fails mid-job is your problem: your schedule, your margin, sometimes your bond. You already prequalify them and you already read their financials, so you already know which ones come back short.
A sub whose books can answer a prequal packet is a sub you can put on a bid list without a second thought, and one who can hold a work-in-progress schedule is a sub who finds his own trouble early enough to fix it himself. That is the whole return to you, and it is worth being precise about it: the improvement shows up in his performance on your job, not in a report we send you about him.
Where the line is
What we do not do
We do not place bonds, we do not have a view on which surety should write your account, and we do not take a fee in either direction for a referral. If a sub is not carrying enough contract complexity for this to earn its keep, we tell him that rather than sell him the smallest thing we have, and we tell you the same.
The question your sub will ask before he calls
What we can and cannot see, in both directions
Our CFO staff work on general contractor engagements. They do not touch the books of subcontractors on your jobs, in any capacity. That is a standing division of who does what inside the firm rather than a decision made case by case, which is why it can go in an engagement agreement rather than staying an assurance on a web page.
Underneath it, access in QuickBooks Online and Xero is granted per company file. The people on your engagement are not in his file and the people on his are not in yours, so it is not a matter of anyone choosing not to look.
It runs the other way too, and this is the part worth being blunt about. Introducing a sub to us does not give you a window into him. We do not report his financials, his margins, his job costs or his bid detail to you, we do not monitor him on your behalf, and we will not answer questions about him. What you get back is a sub whose paperwork keeps up with your job. What you do not get is his numbers.
Where the relationship exists we tell both parties it exists, and the same commitment is written into both engagement agreements. If you would rather we did not take a particular sub at all, say so and we will not.
Making an introduction
What you are actually committing him to
Four steps, and you are only responsible for the first one.
- 01
You make the introduction
An email is enough. You do not need to explain what we do or vouch for the outcome.
- 02
An initial call with him
Half an hour on what his contracts look like and what is actually failing. No charge, and no obligation on either side.
- 03
The Financial Risk Assessment, $497, paid by him
A required step before either side agrees to anything, not an optional add-on. He keeps the findings and the plan whether or not he goes further. You are never invoiced for it and you never see it.
- 04
Both sides decide
If he is not a fit, he is told so rather than sold the smallest package we have. That is the part that protects the credibility you just lent us, and it is why the introduction is safe to make.
If you are reading this about your own books
Your own work-in-progress, bonding capacity, retainage and job costing are the same engagement, and it is written up properly on the commercial page rather than summarised here.
Who we are
Tom Woolley, Founder
Today CFO is a construction financial operations and advisory firm in Houston serving commercial contractors nationally. We are not a CPA firm and we perform no attest work.
Tom Woolley founded the firm after a prior software company exit. Before that he spent nearly six years at Nabors Industries, running job costing and logistics for construction. He traveled internationally to monitor builds, vendor supply chains, inventory, and job profitability in the field.
He holds an MBA rather than a CPA, and the orientation is deliberate: an operator's practice built around the finance function, not a compliance practice that added advisory later. Attest work goes to a CPA firm. Returns are reviewed and signed by credentialed preparers.
Most of our construction clients are commercial contractors. Not construction adjacent, not residential remodelers.
We run the whole function remotely from Houston. Job costing, field receipt capture, accounts payable through Bill.com, and the subcontractor documentation an insurance audit asks for.
We work in QuickBooks Online and Xero, and rebuild the chart of accounts for job-level reporting when it isn't already.
Questions
What partners ask before they introduce anyone
What does this cost me as the general contractor?
Nothing. There is no referral fee in either direction, and we do not invoice you for anything relating to a sub you introduce. If you engage us for your own books that is a separate conversation, quoted against your own scope.
What happens if a sub I send you is not a fit?
He gets told, and so do you. Some contractors are not carrying enough contract complexity for this to earn its keep, and standalone bookkeeping is attached to nothing, so we say that rather than sell him the smallest thing we have. Turning people away is what makes your introduction safe to make.
Do you work with my subs’ existing CPA?
Usually, yes. Most keep their CPA for the return and add this for the contract reporting, which is a different job. Where it makes more sense to consolidate we can, but it is not a requirement and we do not push it if the existing relationship is working.
Can you help a sub who is trying to get bonded for the first time?
That is one of the more common reasons a GC sends someone. A surety asks for financial statements and a current work-in-progress schedule, which is most of what your prequal packet asks for, so the two problems have largely the same answer. A first submission runs on a longer clock than a correction, because there is usually no schedule to fix, only one to build.
Talk to us about your book
The useful first conversation is about your own reporting rather than about referrals. If a sub comes up that you would rather not use again for paperwork reasons, that is worth mentioning too.
Talk to us about your book