18 DAYS BETWEEN WORK AND INVOICE IS NORMAL. IT SHOULDN'T BE.
Billing cycle time is the number of days between when work is performed and when the invoice is submitted to the GC. The industry average for commercial subcontractors is 18 to 22 days. SPM targets 5 to 7 days. That 13 to 15 day difference, on $500K in monthly billing, represents $215K to $250K in cash the business earned but hasn't yet asked to be paid for. It's the single most recoverable cash problem in most subcontracting businesses.
Nobody decides to bill slowly. It happens because billing is a month end task competing with everything else that's due at month end, and because the person assembling the pay app is the same person closing the books. The money involved isn't small and it's not borrowed. It's work already performed, already costed, already paid for in labor and material, sitting in a drawer waiting on paperwork. Work done Friday, invoice submitted Monday, is the target, and it's a scheduling problem rather than an accounting one.
WHAT IT MEANS.
Billing cycle time is the number of days between when work is performed and when the invoice is submitted to the GC.
Billing lag is the cheapest cash in construction because it's the only part of the cycle you control by yourself. The GC's approval time, their AP run, and their retention policy are all negotiations. The number of days between finishing work and submitting the invoice is entirely yours, and most subcontractors are giving away two to three weeks of it every month without noticing.
WHERE THE DAYS GET LOST.
Billing is batched monthly instead of run continuously
Most subcontractors gather everything at month end and send one invoice per project. Work done on the 3rd doesn't get billed until the 31st, which is up to 28 days of billing lag on work completed early in the month. If the GC's cutoff is the 22nd, that work waits until the following month instead, and a single batching habit turns three weeks of lag into seven.
Pay application assembly takes time nobody scheduled
The G702 and G703 don't assemble themselves. Someone has to pull the cost-to-date, calculate percent complete, update the SOV, fill out the lien waiver, and format the submission. When that process isn't set up in advance it takes 3 to 5 days at month end, which pushes submissions past the GC's cutoff date and into the next cycle. The work was done on time and the paperwork wasn't.
Change order billing lags the base contract
Even when base contract billing goes out on time, change orders often run 30 to 60 days behind it. The CO was approved verbally, the written paperwork never got filed, and by the time somebody assembles the CO invoice, 2 months of work has been funded without being billed. On a project with active change orders this can represent 15 to 25% of contract value sitting unbilled while the crew keeps working.
No billing calendar exists
Without a billing calendar that maps each project's GC cutoff date and stages the billing work 5 days ahead of it, billing happens reactively, meaning when somebody gets around to it or when the GC calls asking where the invoice is. Reactive billing is always late billing. The calendar is a one page document and it's the highest return paperwork in the office.
WHAT IT LOOKS LIKE IN DOLLARS.
On $500K in monthly billing, which is $6M in annual revenue, each day of billing lag equals roughly $16,400 in float: cash earned but not yet in the billing cycle. That figure scales linearly, so a contractor at $12M is giving up double per day for the same habit.
At a 5 day lag, the SPM target, float sits at $82K. At 15 days it's $246K. At 20 days, the industry average, it's $328K. At 30 days it's $492K. Moving from the 20 day industry average to the 5 day target recovers approximately $246K in cash timing on $6M in annual revenue, and it recovers it once and keeps it.
A missed cutoff adds a full 30 day billing cycle to that invoice's timeline. On a single $120K invoice, that's $120K sitting uncollected for 30 extra days because of a 6 day submission miss. Nothing about the job went wrong, and the money is 30 days later than it needed to be.
WHAT GETS INSTALLED AT CONTRACT SIGNING.
Every project's GC billing cutoff date gets mapped at signing. Billing work is staged to start 7 days before cutoff and the invoice goes in 5 days before cutoff. That single practice removes the most common cause of billing delay, which is missing the cutoff and then waiting 30 extra days for the next cycle.
The SOV gets formatted, the G702 and G703 template gets set up, the lien waiver form gets identified, and the submission package gets organized at contract signing and not at first billing. Monthly billing then takes 2 to 3 hours instead of a full day of assembly under time pressure.
Every approved CO gets invoiced in the same billing cycle as the base contract instead of separately and later. CO billing is tracked in the same system as base contract billing, so nothing sits out of the monthly submission because it lived on a different list.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
