YOUR PAYMENT TERMS DECIDE YOUR CASH FLOW.
The three most common subcontractor payment clauses, net 30, pay-when-paid, and pay-if-paid, look similar in print but create radically different cash positions. Net 30 means you get paid 30 days after invoice. Pay-when-paid means you get paid after the GC gets paid, so the GC's 60-day collection cycle becomes your 60-day collection cycle. Pay-if-paid means if the GC doesn't get paid, you don't either, and you absorb the owner's credit risk. Most subs sign whatever's in front of them. The ones who negotiate read the clause, push for terms that match the real risk, and walk from contracts that don't.
The payment terms section is short. Three sentences in a 40-page contract, and it decides more about your bank account than the scope pages do. Most subs skip it because it reads like boilerplate and because the leverage feels one-sided. It's not one-sided at signing, which is the only moment it exists. After execution the terms govern, and the only remaining move is pricing the next contract better. Read the clause, ask for the five changes that cost the GC nothing, and price the risk you agree to take on.
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WHAT IT MEANS.
Subcontractor payment terms are the contract clauses that set when and whether you get paid, and the three common ones, net 30, pay-when-paid, and pay-if-paid, create completely different cash positions from identical work.
Courts treat the three clauses differently, which is why the wording counts more than the heading. Pay-when-paid is generally read as a timing mechanism rather than a condition, so if the owner never pays, the GC still owes you eventually and you were only sharing the timing risk. Pay-if-paid is read as a condition on payment itself, so if the owner defaults, disputes, or files bankruptcy, you performed the work for free. Some states ban pay-if-paid as unenforceable and most don't.
THREE CLAUSES, THREE OUTCOMES.
Clause 1, net 30: payment due 30 days after approved invoice
This is the simplest one. You bill the GC, the GC approves the bill, and 30 days from approval or from receipt depending on the language, you get paid. Net 30 is independent of the owner's payment to the GC, so the GC is the one taking on the risk that the owner pays. You're on a fixed timer from approval, which is why this is the gold standard for sub-side terms.
Clause 2, pay-when-paid: payment due a reasonable time after the GC receives payment
This pushes the owner's payment cycle onto you. If the owner takes 60 days to pay the GC, the GC takes another reasonable time on top, usually 10 days, so you're effectively at 70+ days from invoice. The good news is that courts generally read pay-when-paid as a timing mechanism rather than a condition, so if the owner ultimately doesn't pay, the GC still owes you eventually. You're sharing the timing risk, not the credit risk.
Clause 3, pay-if-paid: payment to the sub conditioned on the GC receiving payment from the owner
This one is dangerous. Pay-if-paid clauses make the GC's payment to you contingent on the owner's payment to the GC, so if the owner defaults, declares bankruptcy, or disputes payment, you don't get paid at all. You've absorbed the owner's credit risk for work you already performed. The clause language usually contains phrases like condition precedent or sub assumes the credit risk of owner, and if you see those, the clause is pay-if-paid even when the heading says something else.
WHAT IT LOOKS LIKE IN DOLLARS.
Cost of capital for most $1M to $12M subs is 6 to 12% annualized depending on LOC rates and equity cost. A 30-day extension on a $500K contract at 8% cost of capital costs about $3,300 in financing, which is 0.66% of contract value. A 60-day extension costs about $6,600, or 1.3%. A standard markup of 1.5 to 3% on top of normal pricing covers most slow-pay financing costs, so the number is small and it's knowable before you bid.
A sub with mostly net-30 work has days in AR around 45 to 55 days. A sub with mostly pay-when-paid work has 75 to 90 days. Same revenue, same crews, and the same margins produce different bonding capacity, because the working capital tied up in receivables isn't the same. The clause changes the balance sheet, not just the calendar.
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 2026 National Subcontractor Market Report found 89 percent of business owners negotiate their contracts, and that liquidated damages, payment terms, retainage, scope and project schedules were negotiated most often.
Source: Billd, 2026 National Subcontractor Market Report, page 17 (survey of 623 respondents, published May 13, 2026).
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.
WHAT TO PUSH FOR, AND WHAT IT COSTS.
Ask for removal of the condition-precedent wording that transfers the owner's credit risk to you. This is the highest value ask on the list because it changes what you can lose rather than when you get paid. Plenty of GCs will strike it when asked, because most of them aren't trying to pass you the owner's credit risk on purpose.
Push for wording along the lines of paid within 10 days of GC receipt of payment from owner, but no later than 75 days from invoice. The cap is what stops an uncapped reasonable time from turning into a quarter. GCs accept caps more often than they accept striking the clause, because the cap leaves their structure intact.
Make sure the contract doesn't waive your statutory prompt pay rights in your state. Those rights exist whether or not anybody in the room knows about them, and a waiver placed in the general conditions gives away leverage you would otherwise have at no cost. This ask costs the GC nothing, which is why it usually goes through without pushback.
Include wording that accrues interest on overdue amounts. The dollar value is rarely the point. Interest changes where your invoice ranks in the GC's AP priority, because an invoice that gets more expensive every week is the one their accounting department pays first.
If the negotiation fails, add the margin premium, meaning 1.5 to 3%, to cover the financing cost of the extended receivables. This is the fallback that always works, because it requires nobody's agreement but yours. The mistake is signing aggressive terms at standard pricing and absorbing the added financing cost without adjusting for it.
THE OUTPUTS, NAMED.
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.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $2,500 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $4,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $6,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $7,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $9,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
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, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $4,500, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits 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.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
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.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
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.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
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.
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