This article is sponsored by Siteline.

The construction industry loses an estimated $280 billion each year to slow payment processes, according to Rabbet’s 2024 Construction Payment Report. That’s not only a GC problem; it’s an industry-wide issue that hits subcontractors particularly hard.

Siteline’s State of Subcontractor Billing report data backs this up: only 5% of subcontractors say they’re consistently paid on time, with the remaining 95% waiting an average of 96 days for payment (up 6.6% from 2020). Meanwhile, subcontractors remain responsible for providing labor and materials, maintaining payroll, and absorbing the costs of any delays.

It’s easy to say, “We get paid when the GC pays us — what can we really control?” But the answer is more than many realize. While subcontractors can’t dictate when owners release funds, they can control the accuracy and timeliness of their billing processes. And those tweaks can make all the difference.

The Payment Waiting Game

Getting paid in construction is complicated under the best of circumstances. Each month, subcontractors prepare detailed pay applications, gather compliance documents, and submit to the GC. From there, payment flows through multiple approvals: the GC to the owner, the owner’s lender, and back down the chain before a subcontractor ever sees a check.

Even when nothing goes wrong, this chain adds weeks to the cycle. When pay apps are incomplete or errors force resubmission, payment can slip another month. And when billing is managed manually, delays stack up quickly, which brings us to the most common pitfalls.

Common Billing Breakdowns & Fixes

Based on feedback from hundreds of subcontractors, the same billing mishaps appear again and again. None are surprising, but together, they can compound into serious cash flow problems.

1. Manual Errors

Spreadsheets may be familiar, but they introduce two big problems: errors and blind spots. Broken formulas, mismatched amounts, and missing attachments are common — and even small mistakes can bounce a pay app back.

The fix is standardizing your billing templates and add a simple presubmission checklist. Reviewing amounts, attachments, and required forms before sending helps catch errors early and prevents rework that slows payments down.

2. Visibility Gaps

On top of that, static spreadsheets make it nearly impossible to see the full picture of your accounts receivable (A/R). Which projects are slipping? Which GCs are consistently late? How long have payments been outstanding? Without accurate, accessible data, forecasting turns into guesswork, and managing payroll or planning investments gets harder than it needs to be.

The fix is capturing billing and payment data in a way that can be filtered by project, GC, or timeframe. Even a simple dashboard or monthly report makes it easier to spot trends, identify slow-paying projects, and strengthen cash flow forecasting.

3. Paper Chasing & Siloed Systems

When you have the schedule of values (SOV) in one spreadsheet, change orders in another, receipts in someone’s inbox, and compliance documents with the project manager, each billing cycle becomes a scavenger hunt. Multiply that across jobs and wasted time and energy — it adds up quickly.

The fix is creating a single source of truth for billing information. That could mean consolidating data into one file, designating a shared folder structure, or adopting software that integrates these documents. In short, make it simple to find what you need and avoid the monthly scavenger hunt.

4. Change Order Breakdowns

Change orders are notorious profit-eaters. When field teams fail to communicate changes promptly, or when the back office loses track, work goes unbilled. This leaves money on the table and can potentially invalidate forecasts.

The fix is setting a consistent change order protocol. Require documentation from the field (photos, notes, tickets, etc.), track approvals in a single log, and review that log against billing each month. Even the simplest routine can keep revenue from slipping through the cracks.

5. Lien Waiver Mistakes

Waivers are one of the top reasons for payment delays. Using the wrong form, mistiming submission, or forgetting lower-tier waivers are all grounds for your pay app getting rejected. Add the complexity of varying state lien waiver rules (as if contractors didn’t have enough to juggle), and the risk multiplies.

The fix is building a waiver checklist for each project, tied directly to your billing cycle. Note GC- and state-specific requirements, confirm amounts match the pay app, and track lower-tier submissions in one place. A few extra minutes up front can prevent weeks of delay.

6. Ineffective Follow-Ups

Following up on past-due payments is often handled pretty informally with an occasional call or “just checking in” email after the pay app has been submitted. But without a clear structure, issues fall through the cracks and collections lose momentum. Every extra day a payment sits uncollected chips away at its worth.

The fix is treating collections as part of billing, not as an afterthought. Create a follow-up cadence tied to billing milestones (receipt confirmed, in GC review, owner draw approved, etc.). Assign ownership, log outreach, and escalate consistently. The goal isn’t more calls; it’s timely, stage-specific follow-up that keeps approvals moving.

7. Dependency Risks

Billing knowledge often sits in the head of one or two back-office administrators who know the ins and outs of each project detail — which GCs require notarized pay apps, where change orders are stored, or how to navigate each client’s submission portal. If that person is out on vacation or leaves the company altogether, billing may come to a screeching halt.

The fix is documenting project- and GC-specific requirements in a playbook and cross-training team members so knowledge is shared. Better yet, use a centralized billing tool or a shared system so information lives where everyone can access it. Technology can act as the safety net that keeps billing from stopping when one person isn’t available.

Stronger Billing, Stronger Cash Flow

Billing inefficiencies aren’t just paperwork problems — they’re cash flow problems. While subcontractors can’t control the entire payment cycle, they can control the accuracy, completeness, and consistency of their submissions.

By tightening workflows and addressing common pitfalls, a 96-day payment cycle can shrink to 60 or even 30 days, creating the cash flow predictability every subcontractor needs to grow.