Staying Ahead of the Curve: Practicing Financial Discipline Before a Downturn Hits

Words: Chad Hirschi
Photos: Hirschi Masonry LLC.

In the masonry business, when the phones are ringing off the hook and jobs are lined up back-to-back, it's easy to get lulled into a sense of security. But seasoned contractors know that the good times don’t last forever. Markets tighten, projects stall, and payments slow down. The question isn’t if a downturn will come, but when—and more importantly, whether you’ll be ready.

Being financially prepared for lean times isn't just a good idea—it’s essential for the long-term survival of any construction company. Cash flow is the lifeblood of our business. We all say it: "Cash is king." But in my experience, far too many contractors fail to live by that mantra when times are good. The result? They get caught flat-footed when the economic winds shift.

Let’s talk about how to avoid that.

Financial Fundamentals: Discipline Now or Regret Later
At the core of downturn preparedness is strong financial discipline. That starts with something many of us tend to let slide when we’re busy: keeping your books current and accurate. If your back office falls behind, you lose visibility into your true cash position, and that’s when costly mistakes happen.

Now is the time to make sure your accounting systems are solid. Review your financial reports weekly, not just monthly. Know your margins—not just overall, but job by job. Understand your burn rate. And most importantly, make sure your financial team is equipped, empowered, and held accountable.

This is where too many masonry contractors get tripped up. We put so much effort into winning work and executing in the field, but we don’t apply that same intensity to our back office and particularly billing practices. That has to change.

Get Aggressive on Billing
One of the most powerful tools you have for protecting your business in a downturn is proactive billing. I can’t stress this enough: you must bill early and often. Your goal should be to operate your business with billings in excess of costs. Yes, that’s possible. We’ve done it, and you can too.

Start by front-loading your payment applications strategically. Push for mobilization, material procurement, and early-phase work to be included in your first few draws. If you’re not already having preconstruction conversations with clients about payment structures, start now. Your contract is your blueprint for how you’ll get paid. Treat it with the same level of scrutiny you’d give to a set of structural plans.

From there, implement weekly or at minimum monthly cost-to-complete reviews. These are non-negotiable. You need to constantly measure earned revenue against costs and ensure that you’re staying ahead. When you fall behind on billings, you are essentially floating the project with your own cash—and that is not a position you want to be in if the economy takes a dip.

Set the Standard: 42 DSO or Less
Collections are where many otherwise strong companies stumble. It’s not enough to send an invoice and hope for the best. Your project accountants need to treat collections like a critical business function—which it is.

Our internal benchmark is clear: 42 Days Sales Outstanding (DSO) or less. That means from the moment work is performed, you have 42 days to get the money in the door. To hit that number, you need to be relentless. Clear, accurate, and timely invoicing is just the beginning. You need follow-ups, confirmation of receipt, communication with project managers and AP departments, and a persistent mindset.

And here’s the truth: the squeaky wheel gets the grease. It’s a cliché because it’s true. If you’re not staying on top of your receivables, someone else’s invoice is getting paid before yours. Don’t be afraid to be that squeaky wheel. Be professional, be polite, but be firm. Every day that money sits in someone else's account instead of yours is lost opportunity—and risk.

Understand and Enforce Your Lien Rights
In the construction world, lien rights are your last line of defense, and you need to treat them that way. Every state has its own rules, timelines, and notice requirements. Miss a deadline, and you may forfeit your right to secure payment.

Too often, I see contractors neglect this area because it feels complicated or confrontational. But this isn’t about being aggressive—it’s about being smart and proactive. Educate yourself and your team on the lien laws in the states where you work. Better yet, invest in experienced legal counsel who understands the nuances and can guide you.

Don’t wait until you’re in a bind to start asking questions. Build your systems so that potential lien actions are part of your regular collections process, not a last resort when you’re already underwater.

The Bottom Line: Discipline Wins
Preparation isn’t panic. It’s planning. If you wait until the economy dips to get serious about your finances, your back office, and your collections, it’s already too late.

The masonry businesses that will weather any downturn are the ones who act now—when things are busy, before cracks start to show. That means investing in your financial infrastructure, enforcing discipline across your teams, and never letting billing and collections become an afterthought.

If you take just one thing away from this article, let it be this: the same energy you use to win work must be applied to getting paid for it. You’re not just building walls—you’re building a business. And that business needs strong financial foundations to stand the test of time.

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Written by Chad Hirschi, CEO and Owner of Hirschi Companies, where "Expect More" is more than a motto—it's the standard we live by. Alongside my wife Crystal Hirschi, we operate a robust group of businesses committed to excellence, including Hirschi Masonry, Marnell Masonry, Hirschi Iron & Powder Coating, HaulCore Trucking, Brickhouse Fleet, and Brickhouse Customs. In everything we do, we bring bold, unwavering professionalism that sets us apart and defines who we are.

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