Contractor account

Definition

A trade credit line a house extends to a builder, secured by little more than a history.

Why It Matters

Selling on account is how the trade works and it is where the money is lost. The account carries no collateral in most cases, its risk moves with one builder's own project pipeline, and the remedies when it goes wrong are liens and bond claims that take time and counsel. Read the aging by account and not in total, find out how much sits with the largest five, and ask what the house does at sixty days, because the answer describes the credit culture you are buying.