THE CASH GAP BETWEEN BILLING AND PAYROLL.
Payroll goes out every week and pay apps collect every 45 days. That structural difference between when labor costs leave your account and when billing revenue reaches the bank is the most common reason a profitable subcontractor can't make payroll. On a $5M company billing $400K a month with $100K weekly payroll, there are 4 to 6 weeks of payroll already paid with no matching cash collected, which is $400K to $600K of unfunded labor at any given moment.
This isn't a slow GC problem. Even when every general contractor on your books pays on schedule, the float exists, because the two clocks were never moving at the same speed. Add materials, equipment, and insurance to the labor already spent and the float on that same $5M company often reaches $700K to $1M. The typical line of credit at that revenue is $200K, which is the whole explanation for why the line stays maxed out. It was sized against a number nobody had calculated.
WHAT IT MEANS.
Structural float is the money you've already spent on labor and overhead that hasn't been collected yet, because payroll is paid every week while pay apps collect every 45 days.
Two clocks move at different speeds inside the same company. One is payroll, which cycles every 7 days and doesn't negotiate. The other is collection, which averages 45 days from pay app submission and belongs to somebody else's accounting department. The distance between the two is 38 days, and every dollar of labor you put in the field has to be funded across it out of your own pocket or your own credit.
WHY PAYROLL GETS TIGHT.
Two clocks moving at different speeds
Payroll cycles every 7 days and collection averages 45 days from pay app submission. That's a 38 day distance between when the labor cost leaves your account and when the billing revenue reaches it. On a $5M company with $100K weekly payroll, you're floating 4 to 6 weeks of paid labor with no matching cash collected against it, which is $400K to $600K unfunded.
The float is bigger than the payroll number
Labor is only the piece you feel every Friday. Once you add materials bought ahead of installation, equipment payments, and insurance premiums to the labor already spent, the float on a $5M company often reaches $700K to $1M. Owners size their thinking around the payroll figure and then get surprised by a number that's twice as large.
The line of credit was sized against the wrong number
Most subcontractors at $5M hold a $150K to $250K line of credit. Do the math and the minimum need on that same company is $600K or more. A line that's less than half the structural float will be maxed out permanently, and that is a sizing problem, set years ago and never revisited.
It isn't a slow pay problem, so slow pay fixes won't close it
Owners assume the problem is a GC who pays slowly. Even when every GC pays right on the contract schedule, the float is still there, because it comes from the timing structure and not from anybody's behavior. Following up with a slow payer helps at the edges. It doesn't change the 38 days built into the cycle.
WHAT IT LOOKS LIKE IN DOLLARS.
Monthly billing of $417K, average collection time of 45 days, and labor and overhead of $350K a month produce $525K of unfunded float at any given time. The minimum line of credit that covers it's $600K or more. Most subcontractors at $5M have a $150K to $250K line, and the math above is the entire reason it's always maxed.
Moving from a 45 day collection cycle to a 35 day cycle on a company billing $400K a month puts $130K of additional cash in the business at any given time. That's the cheapest money available to a subcontractor, because it doesn't require a bank, a rate, or a personal guarantee.
He was waking up at 3am worried about losing his house, with both lines of credit maxed and an SBA loan drawn. In the first 30 days of the engagement, $310K in overdue receivables reached the bank. Both lines of credit and the SBA loan were cleared within 90 days, and none of it came from winning new work.
RESEARCH FROM OTHER SOURCES.
These figures come from another company's survey, not from SPM's clients. Each one cites the report and the page.
Billd's 2025 National Subcontractor Market Report found 86 percent of subcontractors come out of pocket to cover labor and 75 percent come out of pocket for materials before they receive payment.
Source: Billd, 2025 National Subcontractor Market Report, page 5 (survey of over 800 construction professionals, published April 15, 2025).
Billd's 2026 National Subcontractor Market Report found subcontractors reported waiting an average of 51 days for payment, against 35 days reported by general contractors.
Source: Billd, 2026 National Subcontractor Market Report, pages 4 and 5 (survey of 623 respondents, published May 13, 2026).
The report doesn't state when the 51 days start. The 2024 and 2025 reports measured the wait from the pay application.
THREE LEVERS THAT CLOSE IT.
Bill earlier inside the pay app window rather than at the deadline. Use stored materials billing to capture cost before installation. Structure T and M invoices weekly instead of monthly. On a company billing $400K a month, moving collection from 45 days to 35 days is worth $130K in additional cash at any given time.
Collections follow a schedule instead of starting when cash gets thin. Follow up starts at day 21, escalates at day 30, and becomes a formal demand at day 45. You learn which GC contacts move checks and which ones only file paperwork, and you track which projects have lien rights expiring so you can use them before they're gone.
Calculate the real number instead of accepting the one the bank offered. Take your monthly cost base and multiply it by average collection days divided by 30. That's your minimum line of credit. Walking into the bank with that math written down is a different conversation than asking for an increase because things are tight.
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.
