CONSTRUCTION ACCOUNTS
RECEIVABLE, MANAGED.
Healthy AR aging for a subcontractor runs toward 45 days, with 90+ days signaling weak collection discipline and 30 days representing a strong position. SPM records and tracks AR aging with a defined follow-up cadence at 30, 60, and 90 days, and flags collection issues early, but does not execute collections or payments on the client's behalf.
AR aging left unmanaged drifts. An invoice that should collect in 30 days slides to 45, then 60, simply because no one owns the follow-up on a defined schedule. That drift isn't usually a payer problem, it's a process problem, and it compounds across every open invoice at once. SPM tracks AR aging against a defined benchmark and follow-up cadence, and records AR activity accurately in the books, while collection execution itself, the actual calls and follow-up with the GC, remains the client's responsibility.
WHAT HEALTHY LOOKS LIKE.
Days Sales Outstanding, DSO, is the standard measure of AR health. 90 days or more signals weak collection discipline, 60 days is still on the slow side, 45 days is the target for a well-run subcontractor, and 30 days represents a strong position.
This benchmark holds flat across trades, unlike gross margin or overhead rate, because AR collection discipline isn't trade-specific the way cost structure is.
RECORDING, NOT EXECUTING.
SPM records AR activity accurately, tracks aging against the benchmark, and flags invoices as they cross the 30, 60, and 90 day thresholds so the follow-up cadence has clear trigger points.
What SPM does not do is execute collections on the client's behalf, make the collection calls, send the demand letters, or negotiate directly with a GC over a disputed invoice. That execution stays with the client, the same scope boundary that applies to AP and payroll.
WHAT MATTERS MOST.
WHERE IT GOES WRONG.
Common belief: "Our clients are just slow payers."
What's actually true: Some are, but most AR drift is a collection cadence problem, not a payer problem. A defined follow-up schedule at 30, 60, and 90 days catches drift before it becomes a pattern.
Common belief: "We'll get to collections when we have time."
What's actually true: Without a defined cadence and clear trigger points, collection follow-up competes with every other priority in the business and consistently loses, which is exactly how invoices drift past 90 days.
Common belief: "SPM handles our books, so they must handle collections too."
What's actually true: SPM records and tracks AR aging accurately and flags follow-up triggers, but collection execution, the actual outreach to a GC, stays with the client. This scope boundary is intentional and consistent across every SPM engagement.
FREQUENTLY ASKED.
