EVERY DAY YOU WAIT YOU FUND IT YOURSELF.
The days between finishing work and collecting for it are days you finance out of your own pocket. Most subcontractors sit at 75 to 90 days and assume that's the industry, when 45 is achievable and 30 is achievable with discipline. Cash Flow Cycle is the CFOS module that compresses billing, documentation, and collections until the cycle stops costing you a line of credit.
Contractors treat days sales outstanding as something the general contractor controls, and roughly half of it's self inflicted. A pay application submitted on the 25th instead of the 20th misses a payment cycle and costs 30 days. A missing lien waiver, an unsigned change order, or a schedule of values that doesn't match the approved one sends the whole application back and costs another 30. Once billing goes out complete and on the calendar the general contractor works to, the same customer who paid in 85 days pays in 45, and nothing about the relationship changed.
WHAT HAPPENS WITHOUT THIS SYSTEM.
Billing goes out late and incomplete
Most general contractors run a fixed pay application window, and an application submitted a few days after it closes waits a full cycle for the next one. Add a missing waiver or a change order that was performed but never signed, and the application gets returned rather than processed. Two avoidable errors turn a 30 day invoice into a 90 day invoice.
Retention is never tracked as an asset
Retention of 5 to 10 percent accumulates across every job and sits uncollected for months or years after the work is complete. Because it isn't on anyone's list, closeout documentation goes unfinished and the money stops being collectible without anyone deciding to give it up. A $4M subcontractor commonly has $150,000 to $300,000 sitting in retention that nobody is chasing.
Collections happen when cash gets tight
When there's no weekly collections routine, calls only get made in the week the money is needed, which is the week it's already too late. The customers who pay slowest learn that nothing happens for 60 days, so they use your invoice as their working capital. Consistent early contact changes payment behavior more than any late fee.
WHAT OWNERS THINK IS WRONG. WHAT IS CAUSING IT.
What owners think: Owners decide their general contractors are slow payers and that pay when paid terms mean nothing can be done, so they absorb the delay and borrow against it.
What's causing it: Pay when paid controls when the owner's money reaches the general contractor and it doesn't control your submission date, your documentation, or your follow up. Most of a 90 day cycle is made up of the days before the invoice was ever complete and the days after it was received while nobody asked about it. Those are the days you control, and they're usually 30 to 40 of them.
WHAT THIS MODULE DELIVERS.
WHERE IT HITS HARDEST.
Quantities have to be agreed before they can be billed
Utility work is billed on installed quantities that have to be verified by an inspector or an engineer before a pay application will be honored. When field measurements aren't captured daily, verification becomes an argument weeks later and the billing waits for it. Documenting quantities as the work is installed is what keeps the application clean.
Stored material and progress billing get contested
Masonry and concrete subs often have material on site before it's installed, and whether it can be billed as stored material depends on language most owners have never read in their own contract. When the general contractor rejects the line, the whole application gets delayed rather than partially paid. Knowing the term before the first application is submitted is worth 30 days.
Small recurring invoices with no collection routine
Inspection and maintenance work generates many small monthly invoices, each too small to justify a phone call on its own. Collectively they can represent a third of monthly cash, and they age past 90 days because no single one triggers attention. A weekly review by aging bucket and not by invoice size is what recovers them.
THE OUTCOME IN PLAIN NUMBERS.
The number to watch is days sales outstanding, and the ladder is straightforward. Ninety days is weak, 45 is the target, and 30 is strong, and nothing else available to you moves cash faster than closing that distance. Cutting 30 days off the cycle on $4M of annual revenue frees roughly $330,000 of cash that used to live in receivables.
That money doesn't come from a bank and it doesn't cost interest, which is why we work on the cycle before we talk about financing anything. Since 2023 we've recovered more than $2.1M in client accounts receivable, and almost none of it came from a hard conversation. It came from applications going out complete, on the calendar, with somebody following up in week two instead of week nine.
FREQUENTLY ASKED.
