Construction cash flow forecast: why fixed-price builders run out of cash
A fixed-price job can be profitable on paper and still leave your account empty for two weeks. Builders go broke when money goes out before it comes in, not only when jobs lose money. This guide shows why, what the insolvency data says, and what a 13-week forecast catches early.
Profit and cash are different things
You pay wages, subcontractors and suppliers as the work happens. You are paid when a stage is claimed and the client or their bank gets around to it. The gap between those two dates is where cash disappears.
Here is an illustration with round numbers. You start the fortnight with A$15,000. In week one you pay wages of A$9,000 and timber of A$22,000. In week two you pay wages again and a A$30,000 subcontractor. You claimed A$80,000 for the frame stage, but it lands at the end of week two. Your balance drops to minus A$55,000 before it recovers to A$25,000. The job is profitable. The fortnight still needs an overdraft you did not plan for.
What the insolvency data shows
ASIC counts companies entering external administration for the first time. In 2025-26, 3,472 of 14,153 were in construction, about 24.5%, more than any other industry. In 2024-25 it was 3,596 of 14,722, also about 24.4%. The 2025-26 figures are provisional, with data to 11 October 2026 (ASIC insolvency statistics).
These are companies of all sizes across the whole construction industry, not only residential builders, and the data does not give a cause. We found no regulator publication that ties builder insolvency to cash flow specifically, so we do not claim it. What we can say is that cash timing is the mechanism you can see and manage.
The rules that shape your cash
Deposits and stage claims
State law limits how much you can ask for up front and how you can claim progress. In NSW the deposit is capped at 10% of the contract price, and contracts over A$20,000 need a progress payment schedule that matches the work carried out (NSW Government). In Victoria a deposit on a contract of A$20,000 or more is capped at 5%, and the Domestic Building Contracts Act sets maximum stage payments for major domestic building contracts (Consumer Affairs Victoria). In Queensland the deposit is capped at 10% or 5% depending on the contract level, and progress payments must relate to progress on site (QBCC Act, Schedule 1B). The practical effect: you cannot front-load cash to cover your costs, so you fund the early stages yourself.
How long clients take
Under Queensland's Building Industry Fairness Act, if the contract does not say otherwise, a progress payment is due 10 business days after the claim, and a payment schedule is due within 15 business days, or sooner if the contract says so (BIF Act 2017). Other states have their own timelines. Check your state and your contract.
Super and BAS
From 1 July 2026, Payday Super means super is paid with each pay run instead of quarterly, and it must reach the fund within 7 business days (ATO). That turns four big super payments a year into one small one every pay cycle. BAS is still quarterly, so confirm your due dates on the ATO site.
What a 13-week forecast shows
A forecast puts every expected payment and receipt on its real date and adds them up week by week. It shows three things a bank balance cannot:
- The lowest balance in the next 13 weeks and which week it falls in.
- Which payments cause the dip, such as a supplier bill, payroll and super landing together.
- What you can move: claim a stage earlier, defer a supplier payment, or arrange an overdraft before you need it.
Seeing the low point three months out is cheaper than finding it on the day. An overdraft you arranged is a business decision. An unarranged one is an emergency.
A simple weekly habit
Once a week, update what each job has cost and how far along it is, then look at the lowest balance. Friday Profit Check does this in about 15 minutes: the how it works page has the steps, and the demo shows a 13-week chart with the low point marked. If margin is your worry as well, read how much profit a builder should make. It costs A$149 once; see pricing.
Sources
- ASIC insolvency statistics, Series 1, published 26 October 2026, accessed 27 October 2026 (2025-26 provisional).
- NSW Government, building contracts guidance, updated 29 April 2026.
- Domestic Building Contracts Act 1995 (Vic), section 11, and Consumer Affairs Victoria, updated 1 July 2026.
- QBCC Act 1991 (Qld), Schedule 1B, and BIF Act 2017 (Qld), current as read on 27 October 2026.
- ATO, Payday Super.