CONSTRUCTION ACCOUNTS
PAYABLE MANAGEMENT.
AP management for a subcontractor means recording payables accurately by job and cost code, tracking what's due and when, and feeding that data directly into the cash flow forecast. SPM records and tracks AP activity as part of every engagement but does not execute payments on the client's behalf, the same recording-only scope boundary that applies to AR.
Accounts payable is often the least examined part of a subcontractor's cash position, tracked loosely in whatever system is convenient and rarely tied directly into the cash forecast. Left that way, AP due dates and cash availability drift apart until a vendor payment becomes a scramble instead of a planned event. SPM records AP accurately by job and cost code and feeds that data into the same 13-week cash forecast used for AR and payroll, so payables are planned for, not reacted to. Execution of the actual payment, cutting the check or sending the transfer, stays with the client.
PAYABLES ARE HALF THE PICTURE.
A cash flow forecast built only around collections misses half the picture. Accurate AP tracking, what's owed, to whom, and when it's due, is just as essential to a reliable forecast as AR aging is.
AP recorded by job and cost code also feeds directly into job costing, so vendor and material costs show up against the correct job and cost line automatically, rather than requiring a separate reconciliation step.
RECORDING, NOT EXECUTING.
SPM records payables accurately, tracks what's due and when, and includes that data in the monthly cash flow forecast and job costing reports.
What SPM does not do is execute payments on the client's behalf, cut checks, initiate transfers, or manage vendor payment relationships directly. That execution stays with the client, consistent with the same scope boundary applied to AR and payroll.
WHAT MATTERS MOST.
WHERE IT GOES WRONG.
Common belief: "AP is simple, we just pay bills as they come in."
What's actually true: Paying reactively as bills arrive, without tying due dates into a cash forecast, is exactly how payables and available cash drift apart until a payment becomes a scramble.
Common belief: "Our cash forecast is mostly about collections anyway."
What's actually true: A forecast built only around AR misses the payables side entirely. Accurate AP tracking is just as essential to a reliable cash position as AR aging.
Common belief: "SPM manages our books, so they probably cut our vendor payments too."
What's actually true: SPM records and tracks AP accurately and includes it in the cash forecast, but doesn't execute payments on the client's behalf. That boundary is consistent across every SPM engagement.
FREQUENTLY ASKED.
