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Industry Insights

Flipping the Construction Payment Script: How Subcontractors Can Take Control of Their A/R

Throughout the ages, the construction industry has been an integral part of human progress. From prehistoric clay dwellings to ancient architectural wonders to our contemporary urban landscapes, its evolution has shaped the complex, perpetually growing world we live in today.

Despite the advances in construction methods, certain aspects remain stuck in the Stone Age. In fact, McKinsey Global Institute’s digitization index ranked construction among the least digitized industries in the world. This is particularly true for the industry’s billing and payment processes, which remain a major pain point for all construction professionals but are especially detrimental to subcontractors. 

This brings us to the topic at hand: the ongoing challenges subcontractors face with outdated payment processes—and how Siteline is modernizing these workflows for faster, more predictable payments.

The subcontractor payment process is grueling.

Getting paid in construction is a ridiculously challenging and drawn-out process. This is especially true for subcontractors—the folks who, despite paying for all the labor and materials for a project upfront, bring up the rear of the construction payment chain.

So, let’s examine the current progress billing process. Every month: 

  1. Subcontractors are required to compile detailed payment applications (for work already completed) that contain various compliance, documentation, and general contractor (GC)- or owner-specific requirements. 
  2. After the pay app is submitted to the GC, subcontractors must wait until the GC receives payment from the project owner or developer. 
  3. Once the GC gets paid, they then review the payment apps and—if everything checks out—disperse payments to the subcontractors. 

Even in the best-case scenario, only 5% of subcontractors report receiving payments on time. In reality, most subcontractors wait about 90 days to get paid for the work they’ve already done. (This information is backed by PwC's 2021/2022 Working Capital Study, which ranks the construction industry as one of the slowest-paying industries in the world.)

Downstream Effects

These long payment delays create negative working cash cycles for subcontractors. To offset these cash gaps, we often see subcontractors take on more projects, seeking bigger profits. But profits alone can’t sustain a commercial contractor’s business when every job starts in a negative cash position. This is a big reason why contracting companies in the US have an 82.8% failure rate (Bureau of Labor Statistics). 

Moreover, delayed payments can jeopardize an entire project, as subcontractors are not only the financial backbone of the job but also the ones performing the actual work. If they’re not paid on time, there’s a real chance they won’t show up the next day. And every day the project is stalled can have serious downstream consequences for the project’s completion and overall profitability.

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Outdated Systems, Overwhelmed Teams

At the root of these issues is the fact that many construction firms still rely on siloed spreadsheets and outdated workflows (e.g., phone calls and emails) to manage billing. This manual approach puts subcontractors’ cash flows at even greater risk, leading to errors—like broken formulas, data entry mistakes, missing documents, and incorrect paperwork. Fixing these mistakes is like a fire drill; it requires extensive adjustments across numerous systems, made more difficult without cross-team visibility and communication. The result? Further payment delays, ballooning A/R, and overwhelmed staff.

It’s time to flip the script.

Operating in survival mode leaves little room for “thinking outside the box” to drive real, sustainable change. As such, subcontractors have become too complacent with the status quo: You get paid when the GC pays you. But, this passenger mindset is a fallacy. Even in a pay-when-paid world, there is a lot that subs can do to impact the billing process and ensure timelier payment. It’s time to flip the script.

Enter Siteline—the market’s first and only pay app and lien waiver management software built specifically for subcontractors. Our mission? To empower subcontractor billing teams with integrated tools that provide end-to-end visibility and financial control. By helping subcontractors accelerate their cash flow and run their businesses more efficiently, we can collectively work toward reducing the contracting’s alarming 82% failure rate.

Here’s how we’re doing it.

In construction, revenue is a team sport. Everyone involved at a company—from accountants and project managers to CFOs and owners—plays an important role in collecting payments. To succeed, it’s vital for teams to move beyond the siloed systems and manual processes that hinder progress. So, rather than fixate on uncontrollable factors, like the “pay-when-paid” model (that ain’t going anywhere for the foreseeable future, unfortunately), we concentrate our efforts on creating efficiencies through technology where there previously were none, supported by a team that deeply understands and cares about the industry.

Purpose-Built, Customer-Led

When we started developing Siteline, we collaborated closely with 10 prominent commercial trade contractors to understand their billing challenges firsthand. Their candid insights directly informed Siteline’s design to solve real industry pain points. This customer-first approach remains central to our product development, ensuring we continuously gather valuable feedback from diverse construction firms across the US and Canada. Through these interactions, we’ve formed genuine partnerships with our customers and successfully collaborated to help solve their cash flow issues. 

A Single Source of Truth

Siteline consolidates once-siloed financial data into a cloud-based hub. A/R teams leverage this data to generate customized pay application forms in Siteline—specific to each GC’s preferences—before shipping them directly to their designated portal. To prevent hiccups that can delay payments, Siteline tracks all compliance requirements, pending change orders, and lien waivers. Integrations with top accounting systems also ensure that any changes made to the schedule of values sync across the company’s financial data, reports, and impacted pay apps.

Siteline gives subcontractors greater visibility—and thus, control—into their accounting workflows, making it easy to spot issues before they result in payment delays. In turn, this helps subcontractors accelerate their payments, improve their cash flow, and run their businesses more efficiently so that their teams can focus on higher-value work. This increased transparency also leads to better decision-making and more accurate forecasting so teams can strategically manage bids, work in progress, and backlog. 

Customers who use Siteline:

  • get paid an average of three weeks faster;
  • save approximately seven days a month managing pay applications;
  • benefit from 6x faster billing workflows; and
  • experience 50% fewer pay application revisions.

Surprisingly Easy Learning Curve

Though robust in capabilities, we designed Siteline to remain versatile, intuitive, and (most importantly) user-friendly. It scales seamlessly across a range of team sizes, adeptly handling intricate workflows for large firms with dozens of offices across the country as efficiently as streamlining the needs of small businesses with just a few team members. 

As one of our large mechanical clients put it, "Siteline’s efficiencies are built in, and it's dead easy to train someone to use the system if I'm out of the office. I took a vacation for the first time in two years!"

Deep Industry Roots

Behind Siteline stands an exceptional team with unparalleled passion for the industry—and the expertise to back it up. For starters, I grew up in a family that owned a contracting business and witnessed firsthand the pains of inefficient financial workflows. Driven to ease these burdens for other hardworking individuals, I’ve spent over 20 years in technology, simplifying payment methods and financial infrastructure for business growth.

Meanwhile, our Head of Construction Solutions was a project manager for a GC in New York, where she worked on major projects like Hudson Yards and JP Morgan's Corporate Headquarters. She knows the billing and payment obstacles subcontractors face on a daily basis better than anyone. 

The rest of our team boasts diverse backgrounds and experiences—including former contractors and project managers—that lend to understanding the frustrations faced by subcontractors. This allows us to not only empathize with our customers but also design tailored solutions that provide real value to their businesses.

Amplifying Potential

Siteline is not a cure-all solution. Nor does it replace or diminish the smart individuals currently managing billing workflows. We built Siteline to streamline repeatable processes in an industry where manual tasks have long been the norm. As such, it’s an amplifier, freeing teams from tedious work so that they can focus on driving organizational progress.

By expediting payments and providing holistic cash flow visibility, Siteline fosters collaboration and aligned understanding between stakeholders. Field and financial teams have access to the most up-to-date project information, making informed and shared decision-making easier. Subcontractors and GCs remain aligned on expectations throughout the project’s lifespan, building trust and strengthening working relationships. Owners, developers, and general contractors benefit from avoiding unnecessary delays and productivity setbacks, making them more inclined to hire the same subcontractors for future contracts. Eventually, everyone is rowing in the right direction.

Ultimately, we aim to nurture a more harmonious construction ecosystem. While we can’t necessarily change how subs get paid, we can challenge the status quo by empowering them to optimize cash flow and run their businesses more effectively. In helping these builders operate smarter and earn the respect they deserve, the wider industry reaps rewards through their success. Because when the foundation thrives, we all prosper.

Co-Founder · CEO
@ Siteline

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