This article is sponsored by Siteline.
If you’re a subcontractor, then you know the drill: you do the work first, and then wait. And wait.
That 90-day payment cycle isn’t just an inconvenience — it’s a constant juggling act that can make or break your cash flow. Add in today’s unpredictable material costs and economic uncertainty, and managing money becomes even trickier.
While you can’t make clients pay faster — this is a pay-when-paid world, after all — you can get smarter about using the financial data you have to make better decisions about which jobs to take, how to price them, and when to expect your money.
Let’s take a look at how to put your A/R data to work in ways that can actually have a big impact on your bottom line.
Your A/R Data Is More Than a Collection Tool
Most of us look at A/R aging reports for one reason: to see which invoices are overdue so we can follow up. But that’s like using a smartphone only to make calls — you’re missing out on a lot of functionality.
Your payment data tells stories about your clients, project managers, and business patterns, revealing which relationships are truly profitable and which ones are costing you money.
The trick is learning to see this information as billing intelligence, not just a tracking mechanism.The trick is learning to see this information as billing intelligence, not just a tracking mechanism.
Turn Payment Patterns Into Better Business Decisions
Contract terms are one thing; actual payment behavior is another. You might have a contract that says “net 30,” but if that client consistently pays in 60 days, then your cash flow planning needs to reflect reality, not wishful thinking.
By tracking actual payment times for each of your clients, you’ll probably find some interesting patterns. Maybe your biggest client isn’t actually your most profitable one when you factor in how long they take to pay. Or perhaps a smaller GC who pays promptly is actually worth more to your cash flow than you realized.
This information becomes powerful when you’re bidding work. Let’s say you're looking at two similar projects with similar margins. One is with a GC who pays in 30 days, and the other is with one who takes 75 days. That extra 45 days of carrying costs — interest on your credit line, opportunity costs, administrative time — can easily eat up 2-3% of your margin.
Use this data to inform your pricing. Bid a bit higher for slow-paying clients to cover those carrying costs, while staying competitive with reliable payers. Even better, use it to decide which relationships are worth maintaining and which ones are actually costing them money.
Build Forecasts Based on This Reality
Along the same vein, a better approach to forecasting uses your historical payment data to predict when money will really hit your account.
If you know that ABC Construction always pays 15 days after the due date, then build that into your forecast. If XYZ Developers pays faster on smaller projects but slower on large ones, then factor that in, too. This kind of realistic planning helps you time your payments to suppliers, lower-tier contractors, and employees much more effectively.
You can also use project-specific factors to refine your forecasts. Large, complex projects often have longer approval processes. Projects with lots of change orders might see payment delays. Seasonal patterns matter, too; some clients slow down their payment processing during busy periods or holidays.
The goal isn’t perfection, but rather forecasts that reflect how your clients actually behave, not how their contracts say they should behave.
Track Which PMs Are Driving Cash Flow
Here’s something many companies overlook: not all project managers (PMs) are equally good at the financial side of their job. Some are great at managing the work but struggle with timely billing, change order documentation, or collection follow-up.
Your billing reports can reveal these differences. Look at metrics like:
- Who consistently gets their billing done on time
- Who’s best at documenting and processing change orders quickly
- Who follows up effectively on overdue payments
- Who lets billable work slip through the cracks
This isn’t about pointing fingers — it’s about identifying where additional training or support might help. Remember, the faster work gets billed, the faster it gets collected. When your PMs understand how their actions affect cash flow, they are more likely to become a part of the solution.This isn’t about pointing fingers—it’s about identifying where additional training or support might help. Remember, the faster work gets billed, the faster it gets collected. When your PMs understand how their actions affect cash flow, they are more likely to become a part of the solution.
Use Your Backlog to Plan Smarter
Your current backlog data can help you see what’s coming down the pipeline, spot potential cash flow gaps or surpluses, and plan accordingly.
Maybe you've got three big projects that all have major billing milestones in the same month, followed by a quieter period. That information helps you plan staffing, equipment needs, and material purchases. It also helps you decide when you can afford to take on additional work or invest in new equipment.
This kind of planning is especially important for growth decisions. Instead of taking on new work based on gut feeling or optimistic projections, you can make decisions based on realistic expectations of when cash will be available.
Monitor Your Projects & Payments in Real Time
The old approach to collections — checking in on overdue invoices once a month — lets too many things slip through the cracks. Today’s construction companies require real-time visibility into the payment status of all their projects.
When everyone on your team can quickly see which invoices are past due, action happens faster. Your office staff can follow up promptly, and your PMs can address issues with clients before they become bigger problems.
The key is having systems that make this information easy to access and act on. Whether that’s better software, regular reports, or just clearer processes, the goal is to eliminate those situations where an overdue invoice sits unnoticed for weeks.
Spot Project Problems Before They Cost You
Here’s a simple but powerful analysis: regularly compare how much you’ve billed on each project vs. how much work you’ve completed. When these numbers don’t match up, it’s usually a sign that something is wrong.
For example, if a project is 80% complete but you’ve only billed 60% of the contract value, then that’s a red flag. Maybe change orders aren’t getting processed properly. Maybe some work isn’t being documented for billing. Maybe there was a change order that slipped through the cracks.
The sooner you spot these disconnects, the easier they are to fix. Waiting until the end of a project to discover missing billings is often too late to recover that revenue.
Making It All Work Together
The construction industry has always been relationship-based, and that’s not changing. But successful relationships require understanding the true costs and benefits of each partnership.
Your A/R data can provide that understanding, helping you build a more profitable business while maintaining the relationships that matter most.
Start simple. Pick one or two areas — maybe client payment patterns or PM performance — and begin tracking them systematically. Consider solutions that automate this analysis, freeing up your time to act on insights rather than gather data. Then, as you get comfortable, expand to other areas.
Ultimately, a healthy cash flow isn’t just about ensuring survival; it’s about having the financial flexibility to seize new opportunities. By transforming your A/R data into actionable intelligence, you’re positioning your business for sustainable growth in an industry where cash truly reigns supreme.