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TL;DR: Construction subcontractor AR collection starts with a one-time audit of every invoice over 30 days called and pursued in the first week. SPM collects $50K-$300K for most new clients in the first 30 days. A weekly Monday morning collections process prevents the backlog from rebuilding. The collection system operates before lien rights are needed.

AR Collections

AR Sitting at 45+ Days
Is Cash You Already Earned.

Most subcontractors have $50,000-$300,000 in invoices over 45 days with no one following up. It is not missing. It is just not collected. Here is the system.

Published: May 2026 · Updated: May 2026

The Problem

What You Are Dealing With

No Follow-Up System

Invoices go out. Emails follow if someone remembers. GCs who are slow-pay stay slow-pay because there is no consequence. The AR ages from 30 to 45 to 60 days with no systematic pressure. At $4M in annual billings that is $33,000 per month in permanent float accumulating in receivables.

AR Mixed With Retainage

Regular AR and retainage receivable often live in the same QuickBooks account. Retainage is not collectible until project completion. Regular AR is. When they are mixed it is unclear what is collectible and what is waiting so nothing gets pursued aggressively.

Collections Treated as Conflict

Many subcontractors avoid collections calls to protect GC relationships. The irony: GCs who pay slowly do so precisely because there is no follow-up pressure. A professional consistent collections process signals financial organization which most GCs respect.

The Fix

How to Fix It

AR audit at engagement start. Pull full AR aging. Every invoice over 30 days gets a call in the first week. Most are collectible immediately. SPM collects $50K-$300K for most new clients in the first 30 days of this process.

Weekly Monday collections. Every Monday morning: pull AR aging, call every invoice over 30 days. Log the call outcome. Follow up every 14 days on outstanding items. 2-3 hours per week at $4M in annual billings. Prevents the backlog from rebuilding.

Separate retainage from regular AR. Retainage gets its own account in ControlQore. Regular AR gets the weekly collection treatment. The AR aging report shows only what is actually collectible and collection action is targeted correctly.

Formal demand before lien rights. For invoices over 60 days with no response: formal written demand on company letterhead citing contract payment terms and invoice date. If formal demand does not produce payment within 14 days lien rights preservation becomes the next step.

Client Outcome

Real Numbers Real Results

Civil Contractor - $7.1M Revenue

This contractor had $310,000 in AR at engagement start with no systematic follow-up. SPM conducted the AR audit in the first week.

$310,000 collected

In the first 30 days. All earned revenue just never pursued.

FAQ

Frequently Asked Questions

What is the fastest way to improve construction cash flow?

Collect outstanding AR. Most subcontractors at $2M-$10M have $50,000-$300,000 in invoices over 45 days that are earned and collectible but never followed up on. An AR audit in the first week typically produces more cash than any other single action.

How often should construction subcontractors follow up on invoices?

Every invoice over 30 days gets a call every Monday. Not every two weeks. Not when cash gets tight. Every Monday as a scheduled process before other work starts. At $4M in annual billings this takes 2-3 hours per week.

When should I use lien rights to collect AR?

Lien rights are the last step before litigation. The sequence: invoice sent, 30-day follow-up call, 45-day formal letter, 60-day lien rights notice. Most AR is collected before lien rights are needed if the earlier steps are systematic.

What is the difference between AR collection and lien rights?

AR collection is the proactive process of following up on invoices before they become disputes. Lien rights are a legal remedy for unpaid invoices. SPM manages the collection process. Most invoices are collected through systematic follow-up before lien rights become necessary.

Josh Luebker

Fractional CFO · The Construction CFO

Former commercial construction project manager and master electrician. Managed 150+ projects totaling $300M+. Now fractional CFO for commercial subcontractors doing $1M–$12M through Sulphur Prairie Management. About Josh → | LinkedIn →

AR Sitting at 45+ DaysIs Cash You Already Earned.