Window and door CFO services: running a backlog you have already been paid for

Backlog is a liability first and revenue later

A window company with a large sold-not-installed board has two balance sheets: the one QuickBooks shows and the one that nets deposits held against product still to be ordered, paid for and installed. When the second one is negative — deposits already spent on last month's manufacturer invoices, marketing or draws — the business is running on next season's customers. It works while sales climb and fails abruptly when they flatten, which is why it is the classic collapse pattern in this trade.

We report backlog coverage every week: deposits held, product cost still to be paid on those jobs, install labour still to be incurred, and the cash actually on hand. If the deposits are funding operations, you know by how much and for how long, and we set a floor — a separate account, or a rule you hold yourself to — below which deposit cash is not touched. Our guide to building a 13-week cash flow forecast shows the format; for a dealer we add a row for backlog burn.

The numbers a dealer should see every week

Margin per opening after everyone has been paid

The gross margin on a window job is not the contract price less the manufacturer invoice. It is that figure less install labour or sub pay, hardware and consumables, disposal, the dealer fee on a financed sale, the commission, and a realistic allowance for callbacks. Dealers who price to a target markup on product routinely discover that a long no-payment promotion plus a commission on the gross price has taken the job below the margin they thought they were earning.

We build the pricing model so that financing cost and commission are inputs, not surprises: a price sheet that adjusts for the promotion selected, commission plans that pay on margin or on funded revenue, and a monthly reconciliation of what each sales rep's book actually earned the company. The same model prices retail work against builder or property-manager volume work, where margins are thinner but deposits, financing fees and commissions mostly fall away.

Rebate tiers: earning volume versus buying it

Manufacturer volume programmes reward purchases, not installs, and the difference invites bad decisions in the last quarter of the programme year. Pulling orders forward to reach a tier can be worth doing when the rebate exceeds the carrying cost of the inventory and the jobs are genuinely sold; it is a loss when the units sit in the warehouse, tie up cash and are eventually installed at a discount. We model each tier decision with the rebate rate, the cash tied up, storage and damage risk, and the effect on the backlog coverage number above, and we forecast tier attainment through the year so the decision is made in month eight rather than month twelve. Where a second brand is being considered, the same model shows what splitting volume does to the rebate on the first.

Adding a crew, a showroom, or a second product line

Growth decisions in this business are capacity decisions. A new install crew adds fixed cost that only pays when the backlog holds above a set number of weeks; a showroom adds rent and staff that have to be covered by a measurable lift in close rate or average ticket; entry doors, garage doors or sunrooms add product lines with different margins, lead times and warranty profiles. For each we prepare a break-even and a downside case, a financing plan for the vehicles and equipment, and lender-ready statements when a line of credit or an equipment loan is part of the answer. Our note on why profitable businesses run short of cash reads like a description of this trade.

When the owner is thinking about an exit — a sale to a larger dealer or a manufacturer-backed group, a management buyout, or a family transfer — the same reporting becomes the diligence package: normalised margin per opening, a deposit liability that reconciles, and a warranty history a buyer can price. Product sourcing that crosses the border, with its rebate and tariff exposure, is set out in our cross-border guide for dealers, and our advisory and CFO services page explains how an engagement is scoped.