WHEN AR IS HIGH
AND CASH IS GONE.
High receivables and no cash is not a slow-pay problem. The money exists — it's sitting in invoices that haven't been collected. The problem is that overhead and payroll don't wait for GC payment schedules. When AR accumulates without a systematic collection process, the gap between what's owed and what's available turns into a cash crisis fast.
THE MONEY IS THERE.
JUST NOT IN YOUR ACCOUNT.
You look at the balance sheet and AR is $400K. You look at the bank account and it's $12K. The accountant says you're profitable. The bank says you're overdrawn. You feel like you're being lied to by your own numbers.
You're not. The numbers are correct. They're just describing two different things. AR is what's owed to you. Cash is what you have right now. On a commercial subcontract those two numbers can diverge by $400K, $600K, $1M — depending on how much work you've billed and how aggressively you're collecting it.
The problem isn't that the money isn't coming. It's that overhead left three weeks ago and the check hasn't arrived yet. If you don't have a system pulling AR in faster than overhead is going out, the gap widens every month until something breaks.
A $2.3M electrical subcontractor came in with AR sitting uncollected and debt piling up to cover what wasn't coming in. A systematic collections process recovered $365K in overdue receivables. All debt was cleared within 120 days. The owner paid out $23K in Christmas bonuses — the first time in 11 years. Read the case study →
THE AGING BUCKET PROBLEM.
Not all AR is equal. Current AR is money that's on its way. Aged AR is money that's getting harder to collect every week it sits. Here's what a typical $400K AR balance looks like when you actually break it down:
That $100K in 61+ day AR is not slow pay. It's abandoned AR. Nobody has followed up systematically. The GC moved it to the back of the payment queue. Every week it ages it gets harder to collect — and your lien rights have an expiration date.
WHY AR PILES UP WITHOUT GETTING COLLECTED.
HOW TO PULL AR IN FASTER.
Most uncollected AR is not disputed. It's sitting in someone's payment queue. A systematic escalation protocol moves it out of that queue and into your account.
FIRST FOLLOW-UP
Confirm receipt of pay app with the payment contact — not the PM. Verify the pay period, amount, and expected payment date. Document the response. This is not a collections call. It's a confirmation call that puts the invoice in front of the right person.
FORMAL FOLLOW-UP
Written follow-up to payment contact and PM. Reference the pay app number, amount, and the 30-day mark. Ask for a specific payment date. If any issues are raised, address them immediately — billing disputes that sit unresolved are the most common reason AR ages past 60 days.
ESCALATION + LIEN NOTICE
Escalate to GC project executive. Issue a preliminary lien notice if jurisdiction allows. A preliminary notice at day 45 on a $500K contract creates urgency that no follow-up email can match. Check your lien deadline for the project — in most states it's 20–30 days before substantial completion.
DEMAND + LEGAL
Formal demand letter. Stop work notice if contract allows. At this point the relationship is already damaged by nonpayment — the only question is whether you collect or write it off. Most subcontractors never get here because the day-45 escalation resolves it.
This is the collection protocol inside the Cash Control System. It runs on a calendar, not on crisis. When it's working, AR over 60 days becomes rare because the process catches everything at day 21 before it ever ages.
WHAT HAPPENS WHEN AR GETS COLLECTED.
The money was always there. In every one of these cases, the receivables existed — they just weren't being collected. A systematic process turned paper AR into real cash in 7–30 days. That's the difference between the balance sheet version of your business and the bank account version.
