WORK OUT THE DAY YOU SHOULD HAVE THE MONEY.
Add the days the owner has to pay the general contractor to the days your subcontract gives him to pay you, and count both from the day the prime contract requires him to submit his invoice. If the prime contract says he invoices on the 25th, the owner has 30 days, and your subcontract says you get paid within 10 days after receipt of payment, your money is due 40 days after the 25th. That's the date, and it's the day you start sending notices.
Two of those three figures live in the prime contract, which most subcontractors have never asked to see even though their own subcontract usually incorporates it by reference. Skip them and you put your own payment terms in the forecast, which is wrong every month in the same direction, and you have no idea which day you became entitled to complain.
WHAT IT MEANS.
The pay-when-paid payment date is the day your money is contractually due, worked out from three figures: the day the prime contract requires the general contractor to invoice the owner, the days the owner then has to pay him, and the days your subcontract gives him to pay you after he receives it.
Ask the general contractor for the payment provisions of the prime contract before you sign. It's a normal request, your subcontract probably already refers to that document, and the two numbers you need are in one article of it. A general contractor who won't show you the payment terms he is flowing down to you has told you something worth knowing at bid time.
THREE FIGURES, TWO OF THEM HIDDEN.
The forecast carries the wrong payment terms
A subcontract that says payment within 10 days after receipt of payment has no net 30 in it anywhere, and yet net 30 is what ends up in the cash forecast, because it's the only number anybody typed. The clause hangs your money off an event upstream of you, so counting from your own invoice date describes a payment that was never promised. The error is one direction every time, which is why a forecast built this way is optimistic in the one month you needed it right.
The prime contract is referenced and never read
Most commercial subcontracts incorporate the prime contract by reference, which means its payment article governs when you get money, and most subcontractors have never seen the document. The submission day and the owner's payment window are both in there. Without them the calculation has one figure out of three and the other two get guessed at, usually generously.
Receipt of payment is an event you can't see
You know when you billed and you don't know when the general contractor was paid, so a clause written off receipt gives you no date to hold anybody to. The prime contract's submission day is the fix, because it's a fixed calendar day somebody agreed to in writing. Anchor the count there and the whole chain becomes a date you can hold somebody to.
WHAT IT LOOKS LIKE IN DOLLARS.
Say the prime contract requires the general contractor to submit his invoice on the 25th, gives the owner 30 days to pay him, and your subcontract says you're paid within 10 days after he receives payment. Thirty plus ten, counted from the 25th, puts your money 40 days after that submission day. Work forward from your own billing cutoff instead and you come out nearly a month early, which is the difference between a forecast you act on and one you argue with.
Without the date there's no moment when patience turns into a claim, so most subcontractors send nothing for sixty days and then send everything at once. By then the schedule has moved and the notice reads as a complaint. With the date, the first notice goes out on a day the contract itself chose, which is the difference between a record and an argument.
DO THIS ONCE PER JOB, AT AWARD.
Not the whole prime contract, just the article covering applications for payment. You need the day he has to submit and the days the owner then has. Ask at bid time or at award, in writing, and keep the answer with the subcontract.
Submission day, owner days, your days. Three numbers, written down at award while somebody is still reading the contract, because nobody goes back to a subcontract in month four to work out a date they could have had in month one.
The 13 week forecast wants a day, and the calculation gives you one. A receipt dated on the term is a guess dressed as data, and it's the single most common reason a forecast says a week is survivable when it isn't.
The day after your calculated date is the day the first notice goes out. Put both on the calendar at award so the decision is already made before the month it gets uncomfortable, because that's the month nobody makes it.
Notice windows and filing deadlines change at the state line, and your own contract may shorten them further. One review covering the notice provisions you sign most often is enough to cover every job after it. SPM isn't a law firm and none of this is legal advice.
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.
| 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.
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