The financial challenges behind the work
- Deposits funding future project obligationsDeposit cash is already committed to building that customer’s pool. Using it elsewhere leaves the project short later.
- Expenses before the next drawExcavation, steel and equipment often have to be paid before the next phase payment arrives.
- Inaccurate job costingIf costs don’t reach the right project, you can’t see which pools or packages are profitable.
- Change ordersUpgrades added mid-project need to be priced, documented and billed, or they reduce the margin.
- Subcontractor payment timingSeveral subs paid in a short window can drain cash between draws.
- Cash gaps between construction phasesWeather and inspection delays push draws back while commitments stay on schedule.
The numbers that matter
These are the measures that tell pool builders the most about how the business is really doing.
Gross margin by pool project
What it measures: What each project earned after direct costs, including change orders.
Why it matters: Shows which project types and packages to sell.
Estimated vs. actual costs
What it measures: Where each project landed against the estimate, phase by phase.
Why it matters: Catches supplier and sub cost increases for future pricing.
Remaining project costs
What it measures: The estimated cost to complete each active project.
Why it matters: Tells you how much of today’s cash is already spoken for.
Customer billing and collection status
What it measures: Deposits and draws billed and collected for each project.
Why it matters: Keeps cash ahead of costs on every job.
Unbilled change orders
What it measures: Approved upgrades and changes not yet invoiced.
Why it matters: Turns extra work into revenue instead of lost margin.
Projected cash requirements
What it measures: Expected deposits and draws compared with upcoming payments.
Why it matters: Shows how many projects you can start at once.
A $100,000 pool project with a $40,000 deposit.
Hypothetical illustration—not a client result and not a guarantee of results.
| Contract value | $100,000 |
|---|---|
| Customer deposit collected | $40,000 |
| Estimated total project costs | $75,000 |
| Expected gross profit | $25,000 |
| Expected gross margin | 25% |
$100,000 − $75,000 = $25,000 expected gross profit. $25,000 ÷ $100,000 = 25%.
All figures are hypothetical.
The business lesson
The $40,000 deposit increases available cash, but the company still expects to incur $75,000 in project costs over the life of the project. A customer deposit is not the same thing as earned profit, and treating it as spendable can leave later phases short of cash.
How deposits are recorded for accounting and tax purposes depends on your accounting method and circumstances, so they aren’t all treated the same way.
How AM Financial helps
Financial visibility into project costs, construction draws, and upcoming obligations helps you evaluate profitability and plan for the cash required to complete active projects.
- Job-profitability reporting: Track costs by project and phase, including change orders, and see what each finished pool earned.
- Cash flow planning: Compare deposits and draws with upcoming subcontractor, material and equipment payments.
- Financial operations support: Add billing support or advanced construction reporting, such as a WIP schedule, where it’s in scope.
Monthly bookkeeping is included in every package. Job-profitability reporting and a monthly cash outlook are part of Profit & Cash Flow and above. Budgeting, forecasting and decision analysis are part of Strategic CFO Partnership. Cleanup, initial job-costing setup and financial operations support (such as payroll, invoicing or advanced construction reporting) are scoped separately. Your written proposal spells out exactly what’s included.
What working together looks like
What we review
To build an accurate picture of the business, we typically review:
- Contracts, draw schedules and change orders by project
- Subcontractor and supplier invoices by project and phase
- Deposits and draws billed and collected
- Estimated cost to complete for active projects
We work from your accounting software, bank and credit card activity, and the records your team already produces. Documents are shared through our secure client portal or a shared folder, and you don’t have to change field or estimating software to get started.
Reporting you may receive
Depending on your package and agreed scope, reporting for your business can include:
- Gross margin by project, including approved change orders
- Billing by phase compared with costs incurred to date
- Deposits received but not yet earned, and upcoming equipment purchases
How it supports your decisions
Together, these reports help you see how much cash is truly available, set draw schedules that keep cash ahead of costs, and decide how many projects you can take on at once. We walk through the numbers with you in plain English at your agreed review meetings.
Questions pool builders ask
How should pool builders track customer deposits?
Record each deposit against its project as money received for work not yet completed, then apply it as phases are billed. Exact accounting and tax treatment depends on your accounting method, which we review with you.
How do I know whether a pool project is profitable?
Code every subcontractor, material and equipment cost to the project and compare the total with the contract value plus approved change orders. Once final costs are in, the job report shows the project’s gross margin before overhead.
How should construction draws affect cash flow planning?
Map each project’s draw schedule against when its costs will be paid. A cash flow forecast across all active projects shows where a draw delay or a cluster of sub payments could leave you short.
How do I track change orders and subcontractor costs?
Each approved change order should add both revenue and cost to the same project, and every sub invoice should identify the project and phase. Unbilled changes are a common reason margins fade.
Why can a pool builder have cash in the bank but still face financial pressure?
Deposits and early draws arrive before most of the work is done, and that cash is already committed to finishing those pools. Tracking remaining project costs shows how much is truly available.