Subcontract Terms · Financial Clauses · Pay-When-Paid · Retainage · Construction Contracts
Subcontract Terms · Pay-When-Paid · Retainage · Liquidated Damages · Financial Clauses
Subcontract Financial
Terms Guide.
Most subcontractors sign subcontracts without fully understanding every financial clause. That's not a knock — subcontracts are long, dense, and written by attorneys who work for the GC. Here are the financial terms that matter most and what each one actually means for your cash flow, your risk exposure, and your ability to collect.
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SPM vs. Other CFO Firms
Most CFO Firms Serving This Trade
- High revenue minimums — most won't serve under $5M
- Advisory only — no bookkeeping, no implementation
- No job costing setup or ControlQore management
- No monthly WIP as standard deliverable
- No pricing published — discovery call required
- No vetted partner network for bonding, lending, or liens
- No prevailing wage specialty
The Construction CFO — SPM
- Serves $1M–$12M — starts at $1,900/month
- Full implementation — bookkeeping, job costing, CFO advisory
- ControlQore setup and managed for you every month
- Monthly WIP standard in Executive tier
- Full pricing published — no discovery call to find out costs
- Vetted partners for bonding, lending, lien services, payroll
- Prevailing wage and Davis-Bacon specialty
What We See in This Business
01
You Sign Contracts Without Reading the Financial Clauses
The financial clauses in a subcontract — payment terms, retainage percentage, lien waiver requirements, dispute resolution, no-damage-for-delay, liquidated damages — collectively define your financial risk on the project. Most subcontractors review the scope and price and sign. The financial clauses get skimmed or ignored entirely.
02
You Find Out What a Clause Means When It's Invoked Against You
The first time most subcontractors encounter a pay-if-paid clause or a liquidated damages provision is when the GC invokes it. By then, the work is done and the financial exposure is locked in. Understanding these clauses before you sign is when you have leverage to negotiate them.
03
You Don't Know Which Clauses Are Negotiable
Some standard subcontract clauses are presented as non-negotiable when they're actually routinely negotiated. Retainage percentage, payment timing, lien waiver requirements, and liquidated damages caps are all potentially negotiable — especially for subcontractors with leverage, track records, and clean financials.
How SPM Fixes It
The Financial Clauses That Matter Most
Pay-when-paid vs. pay-if-paid: pay-when-paid sets a time (you'll be paid when the GC is paid, within reasonable time regardless). Pay-if-paid makes payment conditional on the GC receiving payment — potentially never. Retainage: percentage and release trigger matter — 10% until final vs. 5% after 50% completion are materially different. Liquidated damages: per-day penalty for schedule overruns — understand the daily rate and how schedule is managed before you accept. No-damage-for-delay: your remedy for delay may be limited to time only. Lien waiver requirements: conditional vs. unconditional, timing, and what you're waiving.
What to Request Before Signing
For any contract above your materiality threshold, review: the payment timing language (pay-when-paid or pay-if-paid), retainage percentage and release conditions, liquidated damages rate and cap, no-damage-for-delay clause and its exceptions, and dispute resolution requirements (arbitration, litigation, venue). For significant contracts, have your construction attorney review the financial clauses. SPM can flag financial clauses in contracts you share — identifying terms that create unusual cash flow risk or collections exposure.
SPM Tracks Financial Clause Compliance
For active projects, SPM tracks key financial clause compliance in ControlQore — retainage percentage by contract, payment terms, lien waiver requirements, and notice deadline requirements. When a contract has unusual terms that affect cash flow or collections, those terms are built into the project's financial management from day one.
Service Tiers
Tier 01
Core Financial
Starts at $1,900 / month
- ControlQore setup and management
- Job costing aligned to your estimate structure
- Cost-to-complete tracking — updated monthly
- Full-service bookkeeping — minimum 30 min/week
- Vendor payments via ACH (you approve, we initiate)
- Accounts receivable management
- Bank reconciliations and transaction matching
- Controllership
- 1 monthly CFO meeting
- 60-day onboarding — books migrated to last taxable year
Most Popular
Tier 02
Executive Financial
Starts at $2,900 / month
- Everything in Core Financial
- Monthly WIP schedule — delivered every month, standard
- 13-week cash flow forecasting
- CEO Report — monthly financial dashboard
- 3 CFO advisory meetings per month
- Strategic accountability and actionable to-dos
- Direct access to Josh Luebker
Pricing by Revenue
Revenue Range
(Last 12 Months) |
Core Financial
Monthly |
Executive Financial
Monthly |
| Under $1M | $1,900 | $2,900 |
| $1M – $3M | $2,600 | $3,600 |
| $4M – $6M | $3,800 | $5,500 |
| $7M – $9M | $5,100 | $6,900 |
| $10M – $12M | $6,100 | $8,500 |
| $13M+ | Quoted | Quoted |
Vetted Partner Network
National Lien Services
When AR gets too long, we connect you directly to our lien services partner to protect what you've earned.
Additional cost — not included in monthly fee
Payroll Integration Partners
Prevailing wage and regular payroll software partners integrated directly with ControlQore job costing.
Additional cost — not included in monthly fee
Bonding Partners
Surety relationships and bonding capacity support. We prepare the financials — our partners get you bonded.
Additional cost — not included in monthly fee
Lending Partners
Working capital lines and equipment financing through vetted lenders who understand construction.
Additional cost — not included in monthly fee
Reviewed Financials
CPA-level financial statement reviews for banking, bonding, and large contract requirements.
Additional cost — not included in monthly fee
CPA Coordination
We work alongside your existing CPA — not replacing them. Clean books and job costing make tax time easier.
Included — no extra cost
Common Questions
Straight answers.
What is a joint check agreement and when should I request one?
A joint check agreement requires the owner or GC to make payment checks payable jointly to you and your material supplier — ensuring the supplier gets paid before you can access the funds. Suppliers sometimes request them as a condition of extending credit. As a subcontractor, you can also request joint checks from a GC as a way to fund material purchases on a project where the GC has payment history issues. It's not glamorous but it protects the material supply chain when payment trust is limited.
Are liquidated damages clauses enforceable?
Yes — in most states, liquidated damages clauses are enforceable if the agreed-upon amount was a reasonable estimate of actual damages at the time of contracting and actual damages would be difficult to calculate. Courts disfavor liquidated damages that are so high they function as a penalty rather than a damage estimate. Before signing a subcontract with a high daily liquidated damages rate, understand your schedule exposure and whether the rate is reasonable relative to the actual damages the owner would suffer from a delay.
What's included in Core Financial?
ControlQore setup, job costing aligned to your estimates, cost-to-complete tracking, full bookkeeping (minimum 30 min/week), ACH vendor payments (you approve, we initiate), AR management, bank reconciliations, transaction matching, controllership, and 1 monthly CFO meeting. Starts at $1,900/month.
What does Executive Financial add?
Everything in Core plus monthly WIP schedule, 13-week cash flow forecasting, CEO Report, and 3 CFO advisory meetings per month. Starts at $2,900/month. WIP, cash flow forecasting, and the CEO Report are Executive tier only.
Do you handle payroll?
No. We have vetted payroll software partners — including prevailing wage integrations — that connect directly with ControlQore. Those are separate engagements at additional cost.
How long does onboarding take?
60 days. We migrate your books to the start of your last taxable year, set up ControlQore, and build your job costing structure. Fully operational in two months.
What software do clients use?
ControlQore. All SPM clients run on ControlQore for job costing and WIP. We set it up and manage it — you don't have to learn it. Clients switching from QuickBooks, Sage, or other platforms migrate during onboarding.
Do you work alongside our CPA?
Yes. We work alongside your existing CPA — not replacing them. Clean books and accurate job costing make their job easier at tax time.
What happens when we grow past $12M?
We have a clear graduation path. We prepare your financials, systems, and team for the transition and connect you with the right firm for your next stage of growth.