CONSTRUCTION BILLING VELOCITY.
Billing velocity is the cycle time from work completion to cash receipt, from pay app cutoff to ACH deposit. Most subcontractors have a 75 to 105 day billing cycle without knowing it, and most assume the cycle is set by the GC's pay terms. It's not. About 30 to 50 percent of typical billing cycle time is inside the sub's control: how long the pay app takes to build, how complete the documentation is, when it gets submitted, and how often AR gets followed up. Tightening those four bottlenecks compresses cycle time by 15 to 30 days, which frees 15 to 30 percent of working capital without raising prices, winning new work, or changing customer relationships.
The GC's pay terms set the floor, and your billing velocity sets the cycle you get. Most subs operate 15 to 30 days above the floor and never see it, because DSO is one blended number that does not show where the days pile up. Break the cycle into four segments and each one gets its own fix: manage which work bills in which month, get the pay app out inside five business days, remove the documentation kickbacks, and collect retention instead of waiting on it. None of that requires a price increase or a new customer.
WHAT IT MEANS.
Billing velocity is the elapsed time from when billable work is performed to when cash is received against that work.
Most subcontractors don't measure billing velocity at all. They measure days sales outstanding as a single annualized number, which tells them roughly how long their receivables take without showing where the cycle time accumulates. Two businesses with the same DSO can have completely different cycles, one with fast submissions and slow GC payment and the other the reverse, and the fix is different in each case. Breaking the cycle into segments and measuring each one separately is what makes it fixable.
WHERE THE TIME ACCUMULATES.
Work performed to pay app cutoff
The pay app cutoff date is contractual, usually the 25th of the month for work performed through that date, and work performed after the cutoff goes onto next month's pay app. Most subs don't actively manage which work bills in which month, so end of month push work gets billed in the wrong cycle and waits 30 or more days before recovery. Aggressive cycle management means pushing eligible work into the current cutoff and letting tomorrow's work bill on tomorrow's cycle.
Cutoff to pay app submission
This is the stretch from cutoff date to the pay app being delivered to the GC, and it ranges from 3 days with a disciplined billing team to 20 or more days with a busy PM and no billing cadence. The delay compounds across every pay app on every project. A 14 day delay on a $400K monthly pay app is roughly equivalent to a $200K loan at no interest to the GC every cycle, and most subs read it as administrative slowness rather than as financing.
Submission to GC approval and payment
This is the segment most subs assume is fixed by the GC's pay terms, and it's variable based on documentation completeness. Pay apps submitted with complete waivers, properly executed change orders, accurate SOV billing, and signed compliance documents process at the contractual cycle. Pay apps with incomplete documentation kick back for revision and add 15 to 30 days per kickback, which most subs treat as normal friction when it's cycle time compounding.
Retention hold and retention release
Retention at 5 to 10 percent stays unpaid until project substantial completion, and release requires additional documentation like lien waivers, the warranty package, as builts, and closeout paperwork, plus active pursuit. Most subs treat retention as money that will eventually reach the bank, with no workflow behind the documentation or the follow up. Release that should take 30 to 60 days after completion routinely takes 6 to 14 months when nobody owns the workflow.
WHAT IT LOOKS LIKE IN DOLLARS.
A $5M subcontractor with average receivables turning at 75 days has $1.03M of working capital tied up in AR. Compressing the cycle to 60 days drops that to $822K, a $208K reduction in capital requirement. The cash that was tied up returns to operating availability and stays there.
Pay app cadence takes cutoff to submission from a 14 day average to a 4 day average, which is 10 days. Documentation completeness takes the kickback rate from 1 in 4 pay apps to 1 in 20, worth 5 to 7 days per cycle averaged across all pay apps. Retention pursuit replaces passive waiting with an active release workflow, worth 3 to 6 months on retention timing, which compounds across the AR aging.
A $2M sub compressing the cycle 15 days frees roughly $80K of working capital, which is sometimes the difference between an acceptable month and a payroll week crisis. A $10M sub doing the same frees $400K, which is sometimes the difference between reaching a bonding capacity ceiling and growing through it. The mechanism is identical and the leverage scales with the business.
HOW VELOCITY GETS BUILT.
Pay app work begins on the cutoff date against a written checklist per project, with a submission target of 5 business days after cutoff. A weekly billing review on Mondays covers what got submitted, what's outstanding, and what's coming next. The cadence is what keeps a busy month from pushing billing to the back of the line.
SOV billing rounded to whole percents, a signed change order log kept per project, lien waivers built with each pay app, and compliance documents tracked against contract requirements. Kickbacks become rare events instead of routine friction. Every kickback avoided is 15 to 30 days of cycle time you keep.
AR aging gets worked weekly with direct phone follow up on anything over 45 days. Retention is tracked separately on its own aging schedule with active pursuit at substantial completion. Operations and finance share responsibility for collections, so PMs aren't left to do it alone.
Most subs have functional billing, meaning pay apps get submitted and payments get received, with no billing velocity discipline, meaning the cycle takes whatever time it takes. Adding the structure compresses cycle time inside the first 60 to 90 days of operation. The measurement comes first, because you can't compress a cycle you've never segmented.
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. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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 and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
