3 Ways to End the Year With More Money in Your Pocket



Project Type

With the end of the year approaching quickly, we know that you’re working hard to chase payments and close your books. Set yourself up for financial success as you end the year. But don’t stop there!

These three proactive steps can set your business up for payment victory in 2023 and beyond:

  • Ensure you’re working with reliable contractors on every job (for free!)
  • Automate your documents so you never miss a deadline (or a pay day!)
  • Increase cash-on-hand so you can take on bigger jobs (and more of them!)



Speaker 1 (00:03):
Everyone, my name is Kara. I’ll be your moderator today and we have our two wonderful speakers with us. Brandon, would you like to introduce yourself?

Speaker 2 (00:10):
Yeah, absolutely. My name is Brandon Roach. I’ve been with Level Set almost two years now. Started in the Lean Rights management department and worked my way over to the materials financing realm about halfway through my career here. So yeah, it’s something that I was new to but have learned a ton, especially being with Level Set.

Speaker 3 (00:32):
Awesome. Pearson over here. I’ve been at Level Set almost five years now, and it was a contractor prior to this, and I’ve worked with thousands of contractors and suppliers with protecting their lean rights, so protecting the cash that they have out there on the street. And then same as Brandon, I’ve been pulled into the materials financing realm over the last year and a half and really gotten involved on the ground floor of a lot of projects and helping a lot of contractors keep cash flow open.

Speaker 1 (01:06):
That’s right. Awesome. Well, we’ve introduced ourselves now a little bit about Level Set. Level set is now a Procore company, and we have always had the mindset that we are here to empower you to get paid and we now are in a place where we can say that we can empower you to keep more cash on hand by financing your materials. These are a few of the things that Level Set helps you do. There’s 1,000,001 other things, and now that we have partnered with Procore, there is so much more that we will be able to do to help the lives of everyone in construction. All right, you guys, this is the reason everyone’s here. Three ways to end the year with more money in your pockets. Of course, everybody would love to free up their cash on hand. Everybody would love more cash, more financial flexibility, et cetera.

We’ll give you guys a little bit of insight into how to achieve that. Automating your documents is another great way you have enough to worry about without wondering when is the right time to send those documents, who do I send them to, et cetera. This is a great way to help you do that. And finally, accessing the right job site details before, during and after a job is incredibly important and we can help you do that as well. Moving right along. So save your cash on hand for what matters most to you. I think this is important because that’s gonna be different for everyone. It could be to put back into your business, it could be to buy Christmas presents, it could be

Speaker 3 (02:33):
Bonuses for your hardworking employees. Absolutely. Yeah. So reinvestments back into the business with typical overhead from a new truck, new tools, new equipment, the bonuses where you’re, hey, you wanna reward the people that make everything run and that’s investing back in your employees. So yeah, there’s a ton of different ways and you guys know it, of how you want to use the cash that you have on hand as you close out the year. And then probably the most important one, and we’re gonna get into it with the materials, financing is the cash that helps you just run the business from day to day and kind of avoid those choke points that can constrict your cash flow and kind of prevent you from going full steam ahead on the projects that you wanna win, that you wanna complete and delivering with what you intend to do on each one of those jobs.

Speaker 1 (03:28):
Yeah, absolutely. And Pearson, you mentioned you were a contractor in a previous life and both of you speak to contractors day in and day out. What would you all say is one of the biggest issues or hurdles or struggles within the construction industry as we see it today?

Speaker 3 (03:45):
I think everyone knows labor is tough right now, so it’s hard to find great workers. And a big part of that is you need to pay guys well to attract the people that you want and you need on your cruise. So having a good cash position to be able to keep liquidity while you are keeping payroll running and supplying those guys what they need on the site is huge. Yeah, that’s a big part of it.

Speaker 1 (04:15):
Yeah, absolutely. Brandon, what are you hearing on the ground?

Speaker 2 (04:19):
Yeah, I mean it depends on who you’re speaking to, but across the board, in addition to labor and just project management in general, a big conversation that I keep hearing come up over and over again is just managing like ins and outs and inflows and outflows of money and specifically the timing with which that’s happening is just really tricky in construction in such a fluid type of industry where there’s constantly all sorts of delays and bottlenecks and constraints that are going on. And I wanted to mention, actually one of you asked that initial question on this slide, I actually was speaking with someone a little bit earlier today that’s working at a commercial plumbing business actually in town here in Austin. And she told me that they had a $40,000 loan that they were forced to take out and wound up getting pinched for $20,000 in fees, which is 50%. And so one of the things I’m kind of alluding to is that regardless of what position you’re in is I’m a big proponent for just being more proactive so that you don’t get cornered in a situation and are forced to do something really drastic like that just to save your business.

Speaker 3 (05:36):
Brandon, I know. And then everyone who’s watching knows a huge hurdle for this is just that company had to take that loan cuz they needed the cash to be able to deliver on that project, buy materials, cover overhead, whatever it was, because the game is naturally set up to keep a lot of subs, not necessarily at a disadvantage, but to where they need to constantly tread water where when it’s gonna take you 45 to 60 days to get paid from when you bill for the work completed. But hey, all the materials you need to buy are net 30 terms of your vendors and your payroll runs every two weeks. Those cycles don’t match up nice and neat and evenly. So yeah, great point about how fluid the inflows and outflows are and how such a hurdle that becomes and how thank Kara, the materials financing can kind of help line those dates up with each other to relieve some of that cash stress.

So a quick overview of how the financing is working is those cycles where hey, takes you while to get paid 45, 60 days vendors have net 30 terms, let’s put those together. So we will go purchase materials for contractors and then give out pay when paid up to 120 day terms. So the idea is that contractors can then pay back their, or not pay back, pay for their materials when they’re actually being paid for the work that they’ve completed instead of having that juggling act ahead of time. And by doing that lining up those cycles, it allows ’em to manage their cash in a much more solid sense and predictable sense, which is huge for how you wanna steadily grow your business.

Speaker 1 (07:31):
Absolutely. We talk a lot about how to use this service and any other financial option strategically. You wouldn’t tell someone to come in and do everything with credit cards, but there is a time and a place to use a credit card <affirmative>. You wouldn’t come in and tell someone to go try to get an insanely huge line of credit and put all of their eggs in that basket, but there is a way to strategically use it. And I think being strategic and having people who can help you understand when to use what service is incredibly, is incredibly important when it comes to this idea that you never know when money’s coming in or going out. You never know when a project’s gonna get delayed or you never know when your dream project is gonna become available and you’ve got the crew to take it on. You’ve got the knowledge to know how to do it, but you’re strapped for cash because you haven’t been paid on the job that you’re about to finish. That is something that I know that I hear all the time <affirmative>. And so having the ability to get capital to pay for your materials in 24 to 48 hours is absolutely crucial to being able to grow your business and really taking hold of that financial flexibility and being able to be proactive, like Brandon said, having those <inaudible> set

Speaker 3 (08:49):
Up. Yeah, no, absolutely. Carrie, you bring up a great point about being strategic with this. Brandon, when the guys that you work with, what’s like a common scenario that you see them deploy this to add to their cash on hand or extend the purchasing power that they have for their materials?

Speaker 2 (09:09):
Yeah, that’s a really good question. I was actually just thinking about that whenever Kara was talking about what kind of situation comes up, where this actually would be applicable. And one of the, I guess most unfortunate circumstances is that of what I come across is when the contractor is faced with their dream project, like Kara said earlier, and it’s likely gonna be larger than the capacity of their previous projects that they’re taking on. And so what happens is they may not have the available capital on hand for them to go ahead and execute and start that project on time. And so getting to a point to where you’re having to either pause or delay your start time and sometimes it gets to a point to where the job can’t wait any longer, so it has to go to somebody else. And that’s one of the worst situations that I come across. And so the nice thing about this program is that the barriers to entry are so low, it’s easy for you to even just figure out whether or not this is a viable option for your business. So that’s probably the most drastic situation that I’ve seen. And it happens unfortunately a lot more often than we’d like to see

Speaker 3 (10:24):
<affirmative>. Yeah, cause a lot of those guys, the car’s point, they have the crew, they have the knowledge they can deliver on the work part of it, but because of those cycles and the way that they’re set up with infos and outflows of cash, a lot of times subcontractors are the people financing a project <affirmative>, they’re putting their own money up to start a job, cover labor materials up front and then they wait to get reimbursed. So that’s funding the project and yeah, it’s a heartbreak to see people have to turn down work because of that. And that’s, mine isn’t necessarily about use cases isn’t always the dream project, it’s just people who have a goal for growth <affirmative>, they’re financing their own jobs to start off creates kind of a choke point for how many projects that you can run at any given time. So something super common that I run into is where someone bids five projects expect expecting to win two, they win three and hey, we know we can deliver on two, we wanna do three, gonna help us get to our revenue targets this year, gonna help us grow as a business.

But they have to turn it down. And this has been a great way to where, hey, let’s get the initial purchase or materials purchased, we can use our own cash on hand to cover labor and overhead to get started. And then once that regular draw schedule kicks in, money’s flowing on a regular beat and they can run it from there. So when we purchase these materials, when we finance materials, it’s not all saying, Hey, we have to buy everything for you on the whole project. It can be small pieces like that to get you started to where you can slowly transition over to the typical and regular draw schedule on the project. So yeah, it’s a quick cash infusion to where you don’t wanna say no to work that you wanna win,

Speaker 1 (12:23):
Right? Yes, absolutely. And one thing we haven’t really touched on yet is this idea of you construction is a very relational industry and when we’re talking about relationships and making sure that the relationships with your customers and your vendors and your suppliers are all as tight as they can possibly be and you’re supporting them and trying to keep them healthy, what is the benefit of using materials financing with those relationships, let’s say with your supplier? What does the supplier

Speaker 3 (12:54):
Outfit for? So I’ll touch on both up and down and I’m glad you touched on that with the relationship aspect. Suppliers love this because when we finance the materials, you’d get us a quote from the vendors that you already work with. We’re not gonna go find someone else and say, Hey, use subpar material use, this is what we wanna buy now. We purchase what you already work with. And then once it’s approved, we pay that vendor on day one, <affirmative>. So these vendors that you work with that you’re building up your available credit with that vendor, all of a sudden you’re making essentially cash purchases, you’re gonna be their favorite customer. They’re gonna say, please come back. We like working with you. There’s no risk associated. And this makes us more comfortable to extend the credit that we have with you if we know some of these purchases are coming in on day one.

And then on the top level, if I’m a general contractor and I know that my sub has enough cash on hand to deliver the project, I feel very safe when I go and I meet with that owner, I meet with the architect knowing that there’s not gonna be problems underneath me with a sub petering out on a project. So having confidence in the subs that you’ve hired, that you’ve brought on to deliver and knowing that they have all the tools that they need to follow through, instills a ton of confidence into that GC for how they view you. And then that’s how you get continually asked to and invited to bid on more and more projects with that gc. So yeah, it helps you to win more projects and it helps you kind of build the relationship that you need with that vendor. If you’re trying to grow your business

Speaker 1 (14:43):
110%, I like to talk in visuals and as we talk about this payment chain and where you are in the payment chain and all of the relationships that go with that, being able to pay your supplier on day one and being able to show your GC or the other people on the job that you can not only complete the job because you have the skills, but you now have the cash on hand and the power of your capital to show that I can complete it in the proper timeframe. You are really strengthening that chain. And when you have that chain that becomes unbreakable, that you have a really great group of people that you can work with on a multitude of different projects or you can be referred by those people because they know that they trust you and and you’re building this amazing relationship, I think is a really cool way to look at something like this. And we’re not a bank and our contractors are not a bank, but oftentimes

Speaker 3 (15:38):
Pretty like one. Yeah,

Speaker 1 (15:40):
Exactly. And so it’s worth reinforcing that this is not like a bank loan, this is not something that is a money making situation. What this is is that we’re a help first company and we saw a need with lean rights and we came in and we created a SaaS product to really help contractors manage their lean rights. And then once we got that up and running, we said, what’s the next biggest problem in the industry? Cash flow? How can we do that? How can we take our resources and make the industry better? And that’s where materials financing came in. I do wanna share a customer story that we have just really quickly. Alberto Polanco is one of our valued customers, and the way that he used materials financing was he said, I love my crew, I love my company, and what I wanna do is use materials financing strategically to really push this.

A couple of big projects that he had. And then what he did was he took all of the extra capital that he had and the cash on hand, and he took a lump sum of that to build a bar and his showroom for his coworkers and his employees to come and enjoy time with their family. Not only that, but he’s now able to pay his crew some of the top salaries in South Florida. So his ability to strategically use materials financing to give back to his company is not only strengthening the relationship with his vendors and his suppliers, but also with his crew themselves. He’s paying the livable wage, he’s created an experience where their families can come in and these are the types of things that we just go bananas over because that’s the mission. That’s the whole reason that we’re here is so everyday people like you and I can go out and live this life and build the businesses that we want to be built. And sometimes it sounds like a pipe dream, but when we see it time and time again, we know that it’s completely possible, which is really cool.

Speaker 3 (17:37):
Something I want to touch on really quickly related to what you led into before you brought up Alberto with the supply relationships is in his quote, he talks about the Hey, he sends us the invoice, the quote for the materials, we pay it within two or three days, materials get delivered. Another benefit of this is you can make very quick purchases and that can help you with priority on lead times. Yes. With your suppliers. And if you can get the materials to the job site faster, you don’t have to delay any purchases. That means you can bill for those materials sooner so you’re not further offsetting when you’re gonna get reimbursed. You can have a more steadier billing cycle and billing for more money up front to keep your cash moving. So yeah, that quote reminded me of that. So yeah, thank you.

Speaker 1 (18:31):
Yeah, I mean lead times labor, these are more peripheral things that cash flow has an impact on, and when we’re able to alleviate that cash flow struggle, those peripheral things are able to be taken care of. Like you said earlier, retainage and Brandon, do you think that this time of year being the end of the year, we’re going into this new season, this new year, is this the right time to be looking at proactively setting your business up for success with something like materials financing?

Speaker 2 (19:04):
Yeah, I mean the answer to that is yes.

Speaker 3 (19:08):
I don’t think Brandon was gonna say no to that

Speaker 2 (19:11):
<laugh>. Yeah, that was up

Speaker 3 (19:12):
Really well.

Speaker 2 (19:12):
Yeah, you keyed me up really well. But in all seriousness, yes, and not just now being midway through November, but now being now at any point in time when you ask that question, it’s gonna be to your advantage to try to keep as much hand cash on hand as possible. Because we all know being in construction for however long each of us has and all those on this call here is that you’re a lot more agile and you have a lot more potential for growth whenever you have this cash on hand, whether it be taking on that extra project or two per month or whether, I know Kara kind of joked about it earlier and I think Pearson brought up, you could even think about bonusing your employees and taking care of those who have helped propel your business to where it’s at right now so that you can continue that snowball growth. So just every business has its own set of goals and visions that they have in place. And I’ve never come across a situation where cash on hand hurts them or even just makes it stagnant it, it’s going to do. It’s only going to be able to provide opportunity to enhance the business and further grow it.

Speaker 1 (20:24):
Yeah, absolutely. I love that you took my question and you made it even better. Is this a good time to increase your cash on hand? And there’s never a point when it’s not, so I completely agree. Now, we also know that you may not have you as in our audience, you might not have a project right now. You might not have a project in mind. And materials financing is project by project. So this is no, it’s not a big line of credit, it’s not a credit card. You only need to use it when you need to use it in the event that you don’t have a project in the remainder of this year. We wanted to make sure that there was something for you as well on this webinar. And so we compiled a few other things that I think will be really helpful. A lot of them are also free and things that you can use today, which again, this webinar is being recorded.

We’ll send out a lot of resources including all of these free options for you. And we’re just gonna touch on a couple of them. I’m gonna keep my myself honest, and it is 1 24, we will wrap up by one 30. So guys, we’re gonna run through these pretty quickly, but of this slide, I think what’s really important is that, as I mentioned earlier, we are a help first company. We were born out of a necessity for being able to manage lean rights and make them more automated and accessible to everyone. And we also wanted to make sure that the information itself is made accessible for everyone. So both of you have worked on the lie rights management team of these options that we have, can you guys give us any good examples of how to use, let’s say the payment community or the intense expert content library that we have at our disposal for all of the different states? What are some good examples of ways that you guys see your customers using lane rates or the options available for rights management?

Speaker 3 (22:21):
Well just rattling off at the very top of those payment profiles, we’re collecting a lot of information on each project that the contractors that work with us are on. And then also we pull information from every county recorder across the US so we have a good idea of how a lot of general contractors pay. And that could be a great reputation or not so stellar. So when maybe you’re moving into a new market, you’re going from Georgia and you want to expand into Kentucky, you know, wanna research the GCs that you’re gonna be bidding for, Hey, who are the guys that pay regularly on time? And then that’s who you wanna bid for. So I, I’ve seen quite a few of my guys use that free section religiously to avoid pitfalls that early on in the bid process before projects are even in play.

Speaker 2 (23:15):
Absolutely. Yeah, and I was just gonna add on that even with those that are currently in your network even, I think a good rule of thumb to run by is trust but verify. And this is a way to do that by even checking in every so often on those that are currently customers of yours or yet again, like Pearson said, if you wanna check out someone completely unfamiliar with your business, it’s a great way to do that.

Speaker 1 (23:43):
Yeah, and Pearson, you mentioned different if somebody works in a different state or there’s also different rules for every state. And so one of absolutely that is we created was you can search and filter by state. So let’s say you work in Georgia, but you’re gonna do some work in Texas or Arkansas. You have the ability to now go on for free, have full access to all of the different lie laws in these different states, which is I, I always think about our content team and their ability to write this type of content and the knowledge that must be in their brains is just like, it completely blows my mind every time I think about it. We do have one other thing, but so I’m gonna give you guys just a second to give your last feedback or thoughts on this slide.

Speaker 3 (24:31):
Last quick thing of just how valuable the free information is. I had a guy who was working in South Carolina for a GC that had done a project there before and they tried to withhold 10% for retainage and a lot of people just didn’t think twice about it. And my guy’s like, wait a minute, no, South Carolina 5%, you cannot hold more than that. Then he used that to go find the bylaws that we had sectioned out for it, say, look, this is it. You cannot grab more than that. So it was very cool for him to be able to grab that information easily, kind of deliver it and say, look, I’m not trying to wiggle out anything. This is just the law. And that put himself in a better position to where he is not waiting for that retainage, that extra 5% like months after he’s been wrapped on the project.

Speaker 1 (25:23):
That’s an excellent example. Knowledge really is power, and in that case, knowledge was money. So even better. And the last thing here is access to a full research team. While our research team is not one of our free options, there is a lot of research that can be done for free. Our research team is an incredible group of people that will go out and research your projects and find all of the necessary details that might not be available on a public record, which is really cool. And then finally, automating your documents so you never miss a deadline. I’m gonna kind of briefly touch on this, but the idea is this, you have enough to worry about. You’ve got your crew, you’ve got your business, you’ve got retainage, you’ve got your materials, you’ve got your equipment. There’s so many things that you’re trying to figure out.

Not only that, but you’ve got money coming in, money going out, GCs, vendors, there’s so much happening. Documents are probably the last thing on your mind. Not only that, they’re probably the most boring thing on your mind. You became a contractor to do the work, to work with your hands, to build things. And that is your passion. Documentation might not be your passion. So this is a great way to save time by not having to manually update things, no trips to the post office. This is a way to really set your business up for success and do things in a more automated way so that they’re happening at the right time and you don’t even have to think about it. If you’re interested in our lean rights management software, we can certainly give you more information about that as well. And here we are, right at one 30 I am going to say let’s hold any questions.

We can chat via email or via, yeah, I guess via email if we do have any questions. And at this point we’ll wrap up. Payment help is here. Access to Capital is here. We are again level set, a Procore company, also a help first company. And our entire goal and what gets us up every morning is the idea that we get to help better the lives of everyone in construction. And it is a really wonderful place to be and a great job to have. So thank you both to Brandon and Pearson. Any lasting thoughts, anything else we wanna tell the people today

Speaker 3 (27:35):
We threw so much in and what feels like so little time <laugh>, so much more minutia to everything to deal with cash and construction. Brandon and myself is our job. We work with contractors directly. If you want to go deeper into this, have more in-depth discussions, reach out, talk to that beautifully mustache man that’s hosting the webinar with me, but let’s get gritty about it.

Speaker 1 (28:02):
Fantastic. I love it. Well, Brandon Pearson, I can’t thank you enough for being here today. So grateful for both of you. I’m grateful for everyone who attended. And as we go into a holiday week, hope everyone has a great Thanksgiving. If you’re watching this recording while you’re on Thanksgiving break, happy Thanksgiving. Wonderful to see you all. See you next time.