A GC on net 75 instead of net 30 costs real money — and most subcontractors absorb it silently. Here is how to quantify it, protect against it, and build it into every future bid.
At $4M in annual billings, the difference between net 30 and net 75 is 45 days of float on roughly $333,000 in average monthly billings. At an 8% cost of capital, that is $56,000 per year. Absorbed silently, on every project, every year.
When a GC pays net 75 and you pay your subs and suppliers net 30, you are funding the 45-day gap from your own cash or line of credit. The GC is using your working capital interest-free. That cost is real even if it does not show up as a line item.
Most subcontractors price jobs based on work scope — labor, material, overhead, margin. Almost none add the cost of slow payment. If a GC consistently pays net 75, every job should carry a financing markup to compensate. Almost nobody does this.
When you look at job profitability including payment timing, some GC relationships that look profitable on margin are unprofitable when carrying costs are factored in. Without tracking payment timing alongside margin, you cannot see this.
SPM's pay-when-paid calculator quantifies the carrying cost of slow payment as a percentage of contract value. That percentage gets added to your bid. A GC who pays net 75 gets a 1.2–1.8% markup on every bid — invisible to them, visible to you as margin that covers your financing cost.
The only payment timing you fully control is when you submit. Missing a GC cut-off by one day pushes payment back 30 days — entirely your cost. Build a billing calendar. Submit on the first eligible day of every billing period.
When payment terms are breached, a formal written demand — not an email — puts the GC on notice and starts the clock for escalation. Most GCs will pay promptly when a formal demand arrives.
Serving a preliminary notice early in the project preserves lien rights and signals to the GC that you are paying attention. It does not mean you will file a lien. It means you can — and that changes how late payment is treated.
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