The moment after you win is the most dangerous for your cash. Work begins, costs pile up, and payment is weeks away. That window is the post-award cash flow gap, and it’s where profitable contractors get into trouble.
Key takeaways
- The post-award gap is the stretch between spending on a new contract and being paid for it: often 30 to 60 days after an approved invoice.
- Three things create it: billing errors and invoice rejections, costs not tracked in real time, and no cash reserve.
- A single invoice rejected through a system like WAWF or IPP can push payment back weeks.
- The gap is predictable, so it can be planned for: invoice early and correctly, track costs at the contract level, and size a reserve to your payment terms.
What Is the Gap?
The gap is the stretch between when you start spending on a new contract and when the government actually pays you. You’re funding labor, materials, and overhead in real time, but the cash comes in on the agency’s schedule, often 30 to 60 days after an approved invoice.
Three Things That Create It
- Billing errors and invoice rejections. A single rejected invoice through a system like WAWF or IPP can push payment back weeks. Small mistakes in coding, backup, or timing have an outsized cash impact.
- Not tracking costs in real time. If you don’t know what a contract is costing as it happens, you can’t bill accurately or promptly, and unbilled cost is just cash sitting on the sidelines.
- No cash reserve. Without a cushion, every gap becomes an emergency. A reserve turns a timing problem into a non-issue.
What You Can Do
Invoice early and correctly through the right systems (WAWF, IPP, or whatever your contract specifies), track costs at the contract level so nothing goes unbilled, and build a reserve sized to your payment terms. If you need more room, a line of credit set up in advance bridges the gap without the panic.
Bottom line: the gap is predictable. Contractors who plan for it grow; contractors who are surprised by it stall.
Close the gap before it opens
Start with the free cash flow training, then book a GovCon financial readiness call.
