Roofing Business Cash Flow Planning: 9 Strategies to Survive Slow Seasons

If you run a roofing business, you know the stress that comes when you're waiting on payment for a large job while buying materials for the next one. In this article we’ll break down 9 strategies you can use in your roofing business cash flow planning that will help you stay ahead of the money.

Why Roofing Cash Flow Is Uniquely Challenging

Roofing businesses face cash flow problems that are unique from other trades. 

Seasonality hits hard. Construction employment hits a trough in February—about 10% below the annual average—and peaks in August at 7% above average, according to Bureau of Labor Statistics data. 

Margins leave no room for error. The average construction company net profit margin is 6.3%, with best-in-class firms reaching only 11.9%. When you're operating on margins that thin, even small cash flow gaps can threaten your financial stability

Payment delays are the norm. Despite these unforgiving margins, the cash flow gaps are enormous compared to other industries. One industry report found that construction businesses suffer from extreme payment delays and that DSO for the industry clocks in at 94 days. That means you're waiting months to collect on work you've already completed and paid for. Payment times have been getting worse since 2020, according to the National Federation of Roofing Contractors.

The good news: these problems are solvable. Nickel has helped small businesses like Louisiana’s Riverside Roofing Materials efficiently move hundreds of thousands of dollars and improve financial health.

9 Strategies to Improve Your Roofing Business Cash Flow

1. Eliminate Payment Processing Fees

This is one of the highest-impact, lowest-effort changes you can make to improve cash flow—and most roofing business owners don't realize how much money they're losing.

Credit card processing fees typically run 1.5-3.5% per transaction. That might not sound like much until you do the math against construction margins.

Here's what it actually costs:

The solution: shift payment volume to ACH.

Construction trades businesses have thin margins and high payment volumes. Losing 2-3% per transaction is a silent profit killer.

This is why we built Nickel.

With Nickel, ACH payments are free, not $0.49, not 1%, but free, with QuickBooks Online integration so invoices sync automatically.

A roofing company processing $750K in ACH annually saves $7,500+ compared to typical 1% ACH fees, and far more compared to credit card processing. That's real money back in your business, not fees going to a payment processor.

[See how much you could save with Nickel's calculator]

How to transition customers to ACH:

Set ACH as the default payment method on your invoices. Most customers don't have a strong preference, they'll use whatever you make easy. Frame it as convenience: "Pay directly from your bank—no card needed."

2. Build a Seasonal Cash Flow Plan (with Numbers You Track Weekly)

Most cash flow advice ignores the roofing industry's biggest challenge: seasonal fluctuations and storm surges.

According to the Bureau of Labor Statistics, construction employment swings 700,000-850,000 workers from winter trough to summer peak. Your roofing company follows this pattern, which means you need to plan for it rather than react to it.

How to build your plan:

Start by mapping your revenue seasonality. Pull the last three years of revenue by month. Identify your peak seasons (likely May through September in most markets) and your trough (likely December through February). Look for patterns—they're more consistent than you might think.

Next, map your expense seasonality. Your costs don't disappear in winter. Q1 often brings insurance renewals and tax payments despite low revenue. Q2 has ramp-up costs as you prepare for peak season. Understanding when money goes out is just as important as knowing when it comes in.

Then create a 12-month forecast to outline expected revenue, expected expenses, net cash flow, and cumulative cash position. Calculate your burn rate. Take your total monthly expenses and multiply by 1.2 to create a buffer for surprises. This is what you actually need each month to cover operational expenses, not just what you budget.

Finally, know your cash gap. Take your average days to collect (likely 45-60 for roofing work) and subtract your average days to pay suppliers (likely 15-30). The gap is how long you're financing each project from your own pocket.

On a $50K job with $35K in job costs, that gap means you're floating $35K for six weeks or more.

Plan actions for each phase of the year:

• Pre-Season (March-April): Secure lines of credit while your books look strong, stock materials at good prices, confirm crew availability. This is when you prepare.
• Peak Seasons (May-September): Maximize collections on every job, build your cash reserve aggressively, take on profitable jobs that fit your capacity. This is when you make money—don't let it slip through your fingers.
• Shoulder Season (October-November): Accelerate invoicing on all open projects, start cutting unnecessary expenses, collect aggressively on aging receivables. The goal is to enter winter with cash in the bank.
• Off-Season (December-February): Use reserves strategically for payroll and fixed costs, focus on maintenance revenue and off-season services. Don't panic—if you planned well, you'll get through.

Track weekly to stay ahead of problems.

Every Friday, spend 15 minutes reviewing: current cash position, AR aging (what's overdue?), upcoming payables, and variance from your forecast.

This single strategy—building and tracking a seasonal cash flow plan—does more for financial health than any other. It transforms cash flow management from reactive firefighting to proactive planning.

3. Require Deposits on Every Job

Don't start work without cash in hand. This is standard practice for roofing contractors—the key is enforcing it consistently on every job. Without deposits, you're essentially providing interest-free financing to your customers while paying your material suppliers and labor costs out of your own cash. That's a losing proposition for cash flow management.

Recommended deposit structures:

• Residential jobs: 30-50% upfront before you order materials
• Commercial jobs: Negotiate a mobilization payment of 10-25%
• Insurance claims: Collect the ACV (actual cash value) check before work begins

How to position deposits with customers:

Frame it as standard industry practice and protection for both parties. Include the deposit requirement in your contract and quote. Most customers expect it—you're only hurting your financial health by not requiring it.

If a customer pushes back hard on deposits, that's actually useful information. It may signal they'll be slow to pay the rest of the invoice too.

4. Invoice at Milestones, Not Completion And Encourage Faster Payments

Waiting until a job is done to send your invoice delays your cash inflow by weeks unnecessarily.

For roofing contractors, progress billing is standard practice—use it.

Progress billing structure for roofing jobs:

• Invoice 1: After tear-off/demo is complete
• Invoice 2: After installation is complete
• Invoice 3: After final walkthrough and punch list

This structure means you're collecting money throughout the project instead of waiting until the end. On a three-week job, progress billing can get you paid two to three weeks faster than waiting for completion.

Rules for faster collection:

Send each invoice within 24 hours of milestone completion. Use email plus text-to-pay for the fastest turnaround. The easier you make it for customers to pay, the faster they pay.

For problem accounts, don't start the next phase until the previous invoice is paid. This protects you from completing an entire job and then chasing payment.

5. Pay Your Customers to Pay You Faster

The math often works in your favor. Using terms like 2/10 Net 30 incentivizes businesses to pay quickly. This may sound painful, but consider what you’re getting. A 2% discount is less than you’re coughing up to payment processors like QuickBooks, and getting that money into your accounts quickly eliminates administrative burden and cash flow issues.

When to use early payment discounts:

Early payment discounts work best for larger jobs with creditworthy customers who aren’t the fastest payers—the type who will actually take the discount. Don't offer them to customers who already pay promptly (you're just giving away money) or to customers with a history of slow payment regardless of incentive.

6. Build the Right Cash Reserve

"Build reserves" is generic advice that doesn't help roofing business owners figure out how much they actually need.

Here's what roofing companies should target based on size and market seasonality.

Reserve targets by company size:

For highly seasonal markets (Midwest, Northeast): Target 4-6 months of operating expenses instead. Your off-season is longer and more severe, and you need enough cash to cover operational expenses through an extended slow period.

How to build your reserve:

Set aside 5-10% of every deposit into a separate reserve account. Don't negotiate with yourself on this—make it automatic. 

Reserves are for financial stability during hard times, not for funding growth opportunities during good times. Don’t spend those funds unless you really need to. Future you will be grateful.

When to use reserves:

• Payroll gaps during slow periods
• Unexpected material cost increases or cost overruns
• Equipment emergencies that can't wait

When NOT to use reserves:

• New trucks or equipment upgrades (use equipment financing)
• Office improvements
• Bonuses during good months

7. Protect Cash Flow on Insurance Jobs

Working on insurance projects can create a headache. You’ll have to fight to recoup your operating expenses. Managing cash flow on insurance claims requires effective strategies to make sure you’re getting paid in a reasonable manner.

The insurance timeline reality:

Claim filed → Adjuster visit (1-2 weeks) → Approval → ACV payment → Work completed → Supplement filed → Final payment

Total time from project start to full collection: often 60-90+ days.

That's two to three months of floating your job costs—materials, labor costs, equipment—while waiting for payment. Without a clear plan, insurance jobs can actually hurt your cash flow despite their higher margins.

Expect to Have to Fight for Your Money:

Roofers often report that the insurance payment they receive doesn’t cover the cost of the work. While the annual amount of roof damage is increasing, roofers are still having to fight to be paid for their vital repair jobs. Insurers will often try to underpay for the cost of the job. Evaluate whether this kind of work is worth the logistical hassle. If it is, there are ways to safeguard your interests.

Strategies to protect yourself:

Many roofing contractors leave money on the table by taking too long to file necessary documentation in time.

Collect ACV before starting work. Don't let homeowners hold the insurance check while you buy materials and pay your crew. The ACV payment should be in your account before your first delivery arrives.

Submit supplements immediately with thorough documentation: photos, measurements, manufacturer specs, and clear explanations of why additional work was necessary. Delays in supplement submission cost you weeks of waiting.

Commercial vs. residential insurance:

Commercial insurance claims have longer delays, more documentation requirements, and more complexity. Price your margin accordingly—if you're going to float costs for 120 days, your profit needs to reflect that.

8. Negotiate Better Supplier Terms

Your material suppliers will give you more time to pay—if you ask and have a track record of reliability. Better payment terms from suppliers directly improve your cash flow by reducing how long you're floating project costs.

What to negotiate:

Move from COD or Net 15 to Net 30 or Net 45.

Ask for 2/10 Net 30 terms—a 2% discount if you pay within 10 days. Take this when you have cash, skip it when you don't.

Request seasonal payment plans for large material orders at the start of peak season.

How to get leverage in negotiations:

Consolidate purchases with fewer suppliers. Volume equals negotiating power. If you're spreading orders across five suppliers, none of them have incentive to give you better terms. Concentrate your spending and you become a more valuable customer.

Show your payment history. Reliability builds trust. If you've paid on time for two years, say so. Suppliers want customers who pay—they'll extend better terms to keep you.

Ask what your competitors are getting. Suppliers often have flexibility you don't know about. The worst they can say is no.

The cash flow impact:

Moving from Net 15 to Net 45 on $30K/month in materials means $30K less cash you need on hand at any given time. That's real working capital freed up—money you can use to cover labor costs, build reserves, or take on more jobs without straining your cash position.

9.Use Lines of Credit Strategically

A line of credit is a tool for bridging timing gaps—not a solution for structural cash flow problems or poor cash flow management.

Used correctly, it provides flexibility. Used incorrectly, it creates debt that compounds your problems.

Rules for smart use:

Secure your line when you don't need it. Apply in spring when your books look strongest and you have cash in the bank. Lenders give better terms to businesses that don't appear desperate.

Use it only for timing gaps, not to cover operating expenses you can't afford or to fund business growth you haven't earned. A line of credit bridges the gap between when you pay costs and when you collect—it shouldn't mask the fact that you're losing money.

Pay it down aggressively during peak seasons. The goal is to enter your slow period with minimal balance and maximum availability.

Never max it out. Keep 30-50% available for true emergencies. If you're constantly at your limit, the line isn't big enough or your cash flow problems are structural.

What a line of credit is good for:

• Bridging 60-90 day insurance payment delays
• Material deposits on large commercial jobs
• Seasonal payroll smoothing during slow periods

What a line of credit is NOT for:

• Funding sustainable growth you can't afford from operations
• Covering chronic unprofitability
• Equipment purchases (use equipment financing instead—better terms, and it doesn't eat your credit availability)

The Bottom Line

With proper planning you can break the cycle and build a more profitable roofing business. 

Start with these four actions:

1. Stop waiting on checks and giving away 1-3% of every transaction to payment processors. Offer fast, secure and fee free electronic payment using Nickel to get paid 5-7 days faster. Nickel is designed and a proven fit for roofing companies. It takes just 10 minutes to create and account and see why thousands of trades people trust Nickel for their business critical payments.
2. Build your 12-month seasonal cash flow plan. Map your revenue and expenses by month, identify your danger zones, and track weekly to stay ahead of problems.
3. Require deposits and invoice at milestones. Don't float project costs from your own pocket. Get cash upfront and collect throughout the job.
4. Target 3-4 months of operating expenses in reserve. Build during peak seasons, protect during slow periods. This is what keeps you solvent when cash inflow dries up.

The roofing contractors who manage cash flow well aren't lucky—they're intentional. They plan for seasonal fluctuations, they track their numbers weekly, and they make informed decisions based on data rather than gut feel. 

Your roofing business can do the same.