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From cash flow juggling to confident decisions
Margins are tight across the construction industry, but smart operators are finding ways to stay ahead. Rising material costs and mid-project rate changes can quickly eat into profits, while clients still expect projects to be delivered on time. Relying on spreadsheets or outdated job-costing tools only makes it harder to stay in control.
The good news? With better visibility over cash flow and project costs, many construction leaders are turning constant juggling into confident decision-making. If these challenges sound familiar, you're not alone – and with the right systems in place, cash-flow pressure can become a strategic advantage.
Building resilience through extended billing cycles and retentions
Across Australia and New Zealand, waiting 60, 90 or even 120 days for payment is still common. Add 5 to 10% retention held back until months after a project is finished, and it’s easy to see why cash can feel tight.
In practice, that means you’re often covering labour, materials and insurance well before the money arrives. Cash that could be driving growth is instead tied up in retention. And if a client or tier‑one contractor runs into trouble, you may be left waiting even longer.
Recent moves like Western Australia’s retention trust schemes and New Zealand’s strengthened retention‑in‑trust rules are positive steps. They show the industry is working to protect contractors and improve transparency, but they also highlight how important it is to manage these realities proactively.
Extended billing cycles don’t just influence your bank balance — they shape day‑to‑day decisions. When retention money is held back, it can slow investment in equipment or staff. Some leaders turn to short‑term finance, which brings added costs, while others adjust their project pipeline to smooth cash flow.
This is where real‑time visibility becomes a game‑changer. With a connected system, you can see what’s committed, what’s tied up in retention and where you can adjust to protect margins. Instead of reacting after the fact, you can forecast with confidence and keep projects moving, even in challenging conditions.
Material and labour cost volatility
Even with a solid pipeline, imported material prices are unpredictable. Tariffs and supply chain shifts can add thousands to your costs overnight. Meanwhile, labour shortages are forcing wages up across the board.
RICS confirms these pressures are persisting into 2025, so even projects you priced months ago may already be eroding your margin.
The daily impact on your team and financial management
Late invoices, reconciling across different systems, and re‑entering data just to check where a project stands. For many construction businesses, this has become the norm.
One delayed payment can have a domino effect — pushing back payroll, stretching supplier relationships and forcing you to dip into overdrafts or short‑term finance just to stay afloat. The admin burden pulls your team away from strategic decisions and leaves little time for planning ahead.
That’s where a cloud ERP purpose-built for construction can make all the difference. By unifying your financials, project data and workflows in one system, it becomes easier to stay on top of cash flow, track costs in real time and make confident decisions — without the double-handling.
We can build quite complex projects in the platform and can easily keep a measure on back costing and labour hours in real time.
Strategic consequences: growth, project selection and risk
When cash flow feels uncertain, you can’t confidently bid for larger projects or run multiple jobs at once. Opportunities get turned down — not because they aren’t viable, but because the financial risk feels too high.
It’s no surprise the construction industry consistently records the highest rate of small-business insolvencies in Australia. With tight margins and long payment cycles, even one under‑performing project can push a business to the brink.
“Corporate insolvencies in the construction sector are at their highest level in nearly a decade.” — ASBFEO
Signals you can’t ignore
If any of these challenges sound familiar, your business may already be feeling the strain:
Frequent payroll crunches or over‑reliance on overdrafts
Underestimated costs showing up in reporting
Increasing write‑offs or underquoting to win work
Difficulty tracking committed costs in real time
The first step towards regaining control
Staying solvent in this environment takes more than cutting costs. It requires strategy — real‑time visibility over job costs, progress claims and retentions. That means moving beyond spreadsheets and siloed systems to a connected platform that gives you clarity on every project, every day.
At MYOB Acumatica, we help Australian and New Zealand construction businesses run smarter back offices. We understand the payment practices, subcontracting models and compliance frameworks unique to this industry.
With MYOB Acumatica Construction, you get real‑time cost tracking, consolidated financial visibility and the confidence to make decisions that protect your margins.
If cash flow pressure is shaping the way you quote, hire or grow, now is the time to act.
Explore MYOB Acumatica Construction and see how connected systems can help you regain control.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
