Subcontractor Payment: Cut 96-Day Wait Times to 53 Days

Subcontractors now wait an average of 96 days to get paid after submitting their invoices, according to Siteline's State of Subcontractor Billing in 2025 report.

That's over three months between doing the work and receiving payment. Only 5% of subcontractors consistently receive payment on time, 75%+ cover vendor costs out of pocket while waiting, and 91% of general contractors now consider an owner's payment reputation when deciding whether to bid on projects.

This payment crisis cost the construction industry $299 billion in 2025 alone functioning like a hidden 14% tax on every project. The good news? Subcontractors using modern billing systems are getting paid in just 53.3 days, cutting their wait time by 44%.

Table of Content:

• Why Payments Take So Long: The 4 Core Problems

• The Real Cost of Payment Delays

• Proven Strategies to Cut Payment Times to 53 Days

• Technology Makes the Difference

• Your 53-Day Payment Roadmap

• The Bottom Line: From Crisis to Competitive Advantage

Why Payments Take So Long: The 4 Core Problems

Administrative Bottlenecks Create Unnecessary Delays

Siteline's system tracks over 2,100 custom billing and lien waiver forms across different GCs. According to Rabbet's 2025 report, "lack of organized process" is the 1 reason cited by both GCs and subcontractors for payment delays.

Every invoice needs detailed line items, backup documentation, lien waivers (with state-specific requirements), and approval from multiple stakeholders. A single missing signature, expired insurance certificate, or incorrect lien waiver form can delay payment by weeks.

Change orders compound the problem. When project scope changes, payment approvals freeze until everyone agrees on new terms often pushing payment timelines from 90 to 120+ days.

Cash Flow Issues Create Domino Effects

Many GCs can't pay subs until they receive funds from owners. This "pay-when-paid" model creates cascading delays:

• Owner delays payment by 10 days

• GC can't process sub payments on time

• Subcontractor waits an extra 10+ days

• Cash flow issues ripple through the entire project

The human cost is staggering. Since 2019, there's been a 147% increase in subcontractors dipping into retirement savings to keep businesses afloat. Meanwhile, GCs lose 65 hours each month to payment administration that should go toward project coordination.

Industry Norms Enable Slow Payments

Standard net-30 to net-60 terms sound reasonable, but the data tells a different story:

• Average wait times increased from 90 days (2019) to 96 days (2025)

• Only 5% of subs consistently receive payment on time

• Manual payment methods add 5-10 days versus digital transfers

• GCs spend 65 hours per month managing payment workflows

The inefficiency is built into the system and everyone pays the price.

Disputes and Compliance Halt Progress

Even minor disagreements freeze payments:

• Quality disputes over completed work

• Scope disagreements on change orders

• Missing compliance documentation

• Incomplete lien waiver chains

• Incorrect waiver types (conditional vs. unconditional)

These issues turn 96-day waits into months of uncertainty.

The Real Cost of Payment Delays

Financial Impact: $299 Billion and Counting

Slow payments function as a hidden 14% tax on construction projects. Nearly 1 out of every 7 construction dollars could be eliminated with faster payment processes.

For subcontractors:

• Forced to take high-interest loans to cover payroll

• Miss early-payment discounts from suppliers

• Can't bid on new projects due to cash flow constraints

• 147% increase in using retirement savings (since 2019)

• Increased bankruptcy risk during downturns

Reputation Damage and Lost Opportunities

When payments consistently arrive late, trust evaporates:

• 91% of GCs consider an owner's payment reputation when bidding on projects

• 88% of GCs declined to bid in the last year due to slow-pay reputations

• Top subcontractors avoid slow-paying GCs entirely

• Project teams become adversarial instead of collaborative

The result? Higher costs for everyone and difficulty finding quality trade partners.

Project Delays and Reduced Profitability

Payment delays affect the job site directly:

• Subs slow down work until payment arrives

• Material deliveries pause when suppliers aren't paid

• Schedule delays cascade through dependent trades

• Overall project profitability decreases for all parties

Read more: 5 Invoicing Mistakes Causing Payment Delays & How to Get Paid When Clients Delay

Proven Strategies to Cut Payment Times to 53 Days

For Subcontractors: Perfect Your Billing Process

Subcontractors who digitize billing processes see real results like Kovach Enclosure Systems, which shaved 20 days off payment times and saved 3 days monthly on billing prep.

Submit rejection-proof invoices:

• Use AIA-standard templates or GC-specific custom forms

• Include all required backup documentation upfront

• Match line items exactly to your schedule of values

• Submit on or before deadline never late

• Verify waiver types and notarization requirements

Strengthen documentation discipline:

• Maintain current certificates of insurance

• Complete lien waiver chains from lower-tier subs

• Use correct waiver types (conditional vs. unconditional)

• Create GC-specific playbooks documenting unique requirements

Follow up systematically:

• Send reminders at day 20, 40, and 60

• Use automated payment tracking to monitor DSO

• Process change orders immediately

• Know your lien rights and file preliminary notices when needed

For General Contractors: Automate and Accelerate

Embrace Digital Payment Platforms

Manual processes create delays. Modern software eliminates them:

• Automated invoice receipt and approval workflows

• Digital payment processing (ACH/wire vs. checks)

• Real-time payment tracking for stakeholders

• Automatic compliance document collection

Impact: Subcontractors using digital platforms achieve 44% faster payment cycles, getting paid in 53.3 days instead of 96.

Reduce the 65-Hour Monthly Burden

With GCs spending 65 hours per month on payment workflows, automation is essential:

• Eliminate manual data entry errors

• Automate lien waiver collection and tracking

• Digitize change order management

• Streamline compliance documentation

Set Clear Expectations

Prevent disputes before they delay payment:

• Define exact payment terms in contracts

• Create payment dashboards visible to all parties

• Hold regular payment status meetings

• Establish clear dispute resolution processes

For Owners: Fund for Speed and Build Reputation

Implement Payment Acceleration

Faster payments reduce overall construction costs by 14%. When 91% of GCs factor payment reputation into bids, and 88% actively decline slow-paying projects, payment speed is a critical competitive advantage.

Proven approaches:

• Owner-funded payment acceleration programs

• Joint GC-owner quick-pay initiatives

• Project-specific credit facilities

Create Transparency

Build trust through visibility:

• Share payment schedules with all tiers

• Conduct regular payment audits

• Address issues immediately

• Establish joint dispute resolution procedures

Technology Makes the Difference

The gap between 96-day and 53-day payment cycles often comes down to automation.

Key features proven to accelerate payments:

• Mobile invoice submission and approval

• Automated document collection and verification

• Integrated compliance tracking

• Real-time payment status updates

• A/R aging reports that flag overdue payments

Case study impact: Subcontractors switching from spreadsheets to automated platforms see immediate improvements, with results compounding as teams master the systems.

Read more: 5 Common Mistakes in Accounts Receivable Aging Reports and How to Fix

Your 53-Day Payment Roadmap

This week:

• Audit your last 10 invoices to identify common delay causes

• Review contracts for problematic "pay-when-paid" clauses

• Research digital payment platforms

This month:

• Implement one process improvement (standardized invoices, automated reminders)

• Create GC-specific playbooks documenting requirements

• Track baseline DSO to measure improvement

This quarter:

• Evaluate automation technology for your biggest bottlenecks

• Train your team on digital tools and efficient billing habits

• Monitor results and adjust strategies based on data

The Bottom Line: From Crisis to Competitive Advantage

The construction industry's payment crisis is real 96-day wait times, $299 billion in losses in 2025 alone, and subcontractors raiding retirement savings aren't sustainable.

But the solution is equally real and proven:

• Subcontractors who digitize billing get paid in 53 days instead of 96.

• General contractors who automate workflows save 65+ hours monthly and build stronger trade relationships.

• Owners who establish reliable payment reputations see 14% cost reductions and win better bids from top GCs who actively avoid slow-paying projects.

The 96-day average isn't inevitable. With better processes, modern technology, and stakeholder collaboration, 53-day payment cycles are achievable the data proves it.

What's one change you'll make this week to speed up your payment chain?

Contact Construction Cost Accounting to learn how our solutions help contractors get paid faster, manage cash flow more effectively, and build more profitable businesses.