STORED MATERIALS BILLING: GET PAID BEFORE INSTALLATION.
Most subcontractors wait until material is installed before they bill for it. Stored materials billing lets you bill when the material is delivered instead. On a $250K switchgear package, that's the difference between billing in week 6 and billing in week 16. The contract right already exists in most standard forms, and most subs never use it because they don't know the documentation requirements or never negotiated the SOV line.
This is the cheapest cash improvement available to a material heavy subcontractor, because it takes no new revenue, no price increase, and no change in how you build the work. It's one line in the Schedule of Values plus a documentation habit at the delivery gate. The catch is timing. The SOV line has to be negotiated before the contract gets executed, and once the SOV is locked, adding it takes a change order that may or may not get approved. Ask before you sign and it costs you a conversation.
WHAT IT MEANS.
Stored materials billing is a contractual provision in most AIA A401, A401-2017, and ConsensusDocs subcontract forms that lets a subcontractor include the value of stored materials in each pay application, provided the materials meet the documentation requirements and the GC approves it upfront.
HOW IT WORKS.
On site storage
Material gets delivered to the project site and stored in a designated, secured area. This is the easier route to document and get approved, and it requires the GC to acknowledge the material is on site. Insurance has to cover the stored value. It works best on large commercial projects with dedicated laydown areas and regular GC access for verification.
Off site bonded warehouse
Material gets stored in a third party bonded warehouse, which takes more documentation but is essential for long lead items that get delivered before the site can receive them. The warehouse agreement has to list the GC as an additional insured on the stored value. This is common for switchgear, prefab assemblies, and structural steel delivered 60 to 90 days before installation.
The SOV line
The stored materials provision only works if the Schedule of Values carries a line item for it. Most SOVs don't, because the sub submitted one without a stored materials line and the GC approved it as submitted. That line has to be negotiated before contract execution, and after the SOV is locked, adding it takes a change order that may or may not get approved.
The documentation package
Each stored materials billing event needs a stored materials schedule with item descriptions, quantities, unit values, and storage location. It also needs photos showing the material tagged and identified, a certificate of insurance covering the stored value, and the purchase order or supplier confirmation. Off site storage adds the warehouse agreement, and the GC reviews and approves all of it before the pay app gets processed.
WHAT IT LOOKS LIKE IN DOLLARS.
Take a $3M underground utility job with $600K in pipe delivered in months 1 and 2, before trenching starts. Without stored materials billing, that $600K is cash out for 6 to 8 weeks before the first installation billing event. With stored materials billing and proper documentation, the $600K is in the pay app in month 2 and collected in month 3.
On a $1M electrical contract with $250K in switchgear, stored materials billing turns a 90 day wait into a 5 day billing event. On a $2M underground utility job with $400K in pipe, billing at delivery instead of installation recovers $400K of float per billing cycle. The cash effect scales directly with material value and lead time.
THREE STEPS, IN ORDER.
Every contract with real material value should carry a stored materials line item in the SOV before it gets submitted. The line should cover the full value of material you expect to receive before installation. That conversation happens before the contract is signed, not after the first delivery is sitting in the yard and you're scrambling for a billing line.
Before the first stored materials billing event, confirm what this GC wants: photo format, tagging requirements, insurance certificate format, and the warehouse agreement template if the material is off site. Every GC is a little different. Getting it wrong on the first pay app delays collection by 30 days, and getting it right means every cycle after that goes through cleanly.
The package gets built at delivery, not when the pay app is due. Photos taken at delivery, tags applied at delivery, and the insurance certificate updated at delivery. When the pay app window opens the package is already assembled, and the CFO tracks open stored materials billing opportunities monthly against confirmed deliveries so nothing gets missed.
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.
