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Residential Roofing

Tips for Managing Cash Flow During the Pandemic

By Karen L Edwards

May 08, 2020

A man assessing cash flow at his computer

Managing cash flow can be hard enough during normal business operations; managing it during a pandemic can bring extra challenges. While roofing has been deemed an essential business in just about every state, that doesn't necessarily mean that business will continue as usual.

Fortunately, there are some tips that you can follow to help you stay on top of managing your cash flow.

Tips for Improving Your Cash Flow

Between savvy business practices, technological pivoting, and potential government aid programs, there are a number of ways you can keep your cash flow healthy during the COVID-19 pandemic. Here are some actions you can take to try to keep a little more cash coming into your business.

Try to Receive Payment Earlier

Consider offering an incentive to customers who are willing to pay quicker or pay more upfront. You can also help your cash flow and your customers during this time by offering special financing opportunities. For example, through GAF Smart Money, homeowners can access different financing options.

Financing can be a win-win for both the contractor and the property owner because it allows the customer to pay in small, affordable installments, but the contractor can receive full payment from the financing company shortly after the job is done.

Categorize Your Payables

Ranking and categorizing payables is one of the first steps to take when managing cash flow. Roofing Technology Think Tank (RT3) board member Ken Kelly said in a recent webinar that his company, Kelly Roofing, uses three categories to prioritize payables. First is the must-pay category, which is for priority payables like payroll. The second category is for strategic partners, companies who are very important to their business and should be paid quickly whenever possible. Everyone else falls into the third group.

Kelly Roofing prioritizes payment in that order. You may want to make as many of your payments on time as possible, but if cash flow is challenging, prioritizing in this way can help you stretch your budget a little further.

Renegotiate with Vendors

Now is a good time to reach out to your vendors and suppliers to try to renegotiate the terms for your payments. Many companies are offering assistance, and delaying payments or locking in better terms could be an option to help manage your cash flow. Keep in mind, though, that other companies may also be in similar circumstances.

Review Your Contracts

Cotney Construction Law suggests contractors review their contracts for terms, such as price acceleration and force majeure provisions, that may be helpful to your business during the pandemic. You can find some useful information on the company's website but always speak with a legal professional for advice.

Contact Your Insurance Agent

Your insurance agent can tell you if your business operations coverage excludes pandemics. They can also work with you to navigate all of your coverage and help determine if you can make a claim under any of your policies.

Using Government Relief to Stabilize Cash Flow

While still in their early stages, the government has recently passed or bolstered legislation meant to ease the financial strain on small businesses during the pandemic. Here's how you can take advantage of this aid.

Apply for Relief under The Coronavirus Aid, Relief and Economic Security (CARES) Act

On March 27, 2020, the CARES Act was passed to help small businesses get economic relief during the pandemic. The National Roofing Contractor's Association put together a helpful summary of the provisions that are applicable to small businesses.

Under the CARES Act, businesses with fewer than 500 employees can apply for assistance from the Payroll Protection Program (PPP) as long as they were operational as of February 15, 2020. The loan amount is determined by the company's average monthly payroll and can be for as much as 250%, up to $100,000 per employee. The assistance can be used for expenses associated with payroll, rent, utilities, employee leave, insurance premiums, and more. When certain conditions are met, a portion of the loan will be forgiven by the Small Business Administration.

Look into Other Small Business Resources

The Small Business Administration provides comprehensive guidance on resources available to business owners during this unprecedented time. Contractors should check frequently for updates. The NRCA is also hosting Telephone Town Hall meetings where you can ask specific questions about how COVID-19 is impacting the roofing industry.

Managing cash flow might be difficult in the months ahead, but a combination of some practical money-saving steps and government relief could help you get through this difficult time.


The information contained in this article was authored by a third party and is for informational purposes only. It is not intended to constitute financial, accounting, tax or legal advice. GAF does not guarantee the accuracy, reliability, and completeness of the information. In no event shall GAF be held responsible or liable for errors or omissions in the content or for the results, damages or losses caused by or in connection with the use of or reliance on the content.

About the Author

Karen L. Edwards is a freelance writer for the construction industry and has a passion for roofing, having worked in the industry for 20 years.

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