THE COST OF SLOW BILLING IN CONSTRUCTION.
Every day a pay app sits unsubmitted after the billing period closes is a day added to your cash conversion cycle, permanently, for the remainder of that project. Most subcontractors treat slow billing as an inconvenience. It's a cash flow tax you pay voluntarily every month. On a $5M revenue book, a consistent one week billing delay across active projects costs approximately $96,000 in permanently deferred cash annually.
Billing velocity is the biggest cash flow improvement a subcontractor controls by himself. You can't make a GC pay faster than the contract allows, and you can't renegotiate a pay-when-paid clause after signing. What you can do is submit every pay app on the same date every month without exception. Every week you recover in billing timing is a week of collection you get back for good, on every remaining draw of every open job. It costs nothing except discipline, which is why it's the first thing we fix.
WHAT IT MEANS.
Slow billing is the habit of submitting a pay application after the billing period has closed, which adds those days to your cash conversion cycle for the rest of that project.
The reason this one is worth fixing before anything else is that it's entirely inside your walls. Nobody has to agree to it, no contract has to be renegotiated, and no GC has to change how they operate. A date on a calendar and one person responsible per job is the whole intervention, and the money it recovers is the same money a factoring company would charge you a fee to advance.
WHY THE BILL GOES OUT LATE.
There's no fixed cut off date
This is the most common cause. Billing happens when somebody gets around to it: the end of the month, when the PM finishes the percent completes, or when the bookkeeper has time. Without a fixed date that everyone knows and honors, billing floats to whenever it's convenient. Convenient is always later than it should be.
PM percent completes come in late
The billing depends on the PM submitting percent complete assessments for each SOV line. If the PM is busy, that assessment doesn't happen until somebody reminds him, and the reminder goes out after the cut off has already passed. The percent complete has to be a recurring calendar task due two days before cut off, not a request somebody sends on cut off day.
Waiting for perfect numbers
Some owners hold billing until every change order is confirmed, every stored materials invoice is documented, and the numbers are right to the dollar. Submit what's ready instead. A partial pay app submitted on time starts the collection clock on the billable portion, while a complete pay app submitted late costs you the full collection delay. Supplement the missing items on the following billing cycle.
Nobody owns the billing process
Billing doesn't happen by itself. Somebody has to own the process: pulling percent completes, reviewing the SOV lines, assembling the G702 and G703, and submitting the package. When nobody owns it, it gets done when somebody notices it hasn't been done. That's the difference between a system and a habit.
WHAT IT LOOKS LIKE IN DOLLARS.
A consistent one week billing delay across active projects costs about $57K a year at $3M of revenue, $96K at $5M, and $154K at $8M. Those figures are the carrying cost of the delay. Every week of delay pushes every future payment on that project one week further out for the duration of the project.
Submit pay app #1 a week late. The GC processes it on their normal cycle, so you get paid a week later than you would have. Now submit pay app #2 on time: the GC's clock still runs from when they received #1, so the collection cycle for #2 is already one week displaced. Submit #3 through #6 all on time and every one of them comes in a week late, because the first submission set the clock. Recovery means submitting one pay app early, which almost never happens, so the delay rides through to closeout.
On a 6 month project, a one week billing delay at month one costs you six months of carrying that shortfall. You pay overhead and payroll during those six months out of the LOC or out of cash reserves that never needed to be drawn. The interest on that draw is the visible cost, and it's the smaller half of the bill.
A BILLING CALENDAR THAT RUNS ON SCHEDULE.
Pick a cut off date, the 25th for most commercial subcontractors, and every project bills on that date. Treat it the way you treat payroll: it doesn't move for a missing number or a busy week. Ownership of the submission is assigned by project, so every active job has one person responsible for getting that pay app out by the cut off.
A billing calendar that runs on the 25th every month feeds a 13 week cash forecast that's accurate. Every expected payment maps to the 25th plus that GC's payment cycle days, which gives you an expected receipt date instead of a hope. That forecast reveals cash problems 6 to 8 weeks out. None of that visibility is possible without a consistent, predictable billing date.
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, and no add-ons.
Pricing
| 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.
FREQUENTLY ASKED.
