What is Outside Financing?

Assets, in the context of the construction industry, refer to any owned resources or properties that add value and can be converted into cash. There is a vast range of assets in construction, including land, buildings, machinery, vehicles, materials, and tools. Even intangible items like contracts, licenses, brand reputation, and technical know-how are also considered assets. Investments in staff training, software systems, patents, and copyrights also represent assets as they contribute to the operational efficiency and competitiveness of the construction company. Therefore, asset management is vital in construction for optimal utilization and maintenance of these assets.

A payment bond is a type of surety bond commonly used in the construction industry to guarantee that subcontractors, laborers, and material suppliers will be paid for their work and materials on a project—even if the prime contractor faces financial difficulties. This security allows subcontractors to manage their cash flow more effectively and take on projects with reduced financial risk. Additionally, payment bonds help prevent the need for subcontractors to file liens against the property, which can be a complex and time-consuming process.

For subcontractors, working on bonded projects requires attention to detail in documentation and adherence to specific procedures. They must maintain accurate records of work performed and materials supplies, as these may be necessary to support a claim against the bond if payment issues arise. Therefore, subcontractors must familiarize themselves with the bond’s terms, claim processes, and any statutory limitations or notice requirements.

To that end, implementing a solution, like Siteline, to centralize financial data—including bond-related information—across all your projects is incredibly helpful in managing payment bonds. Siteline can also:

• Track payment schedules and alerting users to potential delays
• Provide cash flow forecasts that account for bond-secured payments
• Offer insights into project financial health to preempt payment issues

To see how Siteline can streamline your payment bond management—and your billing and collections workflows as a whole—request a personalized demo today!

A subcontractor, also known as a trade contractor, is a specialized construction professional that a general contractor (GC), construction management property, owner, developer, or other entity hires to perform specific work on a construction project. Subcontractors typically specialize in a particular trade or craft, such as electrical work, plumbing, HVAC installation, framing, roofing, glazing, flooring, or drywall installation. They are bound by a contract that outlines the tasks they need to perform as well as deadlines and terms of payment. 

Subcontractors are distinguished from GCs in several ways. GCs oversee the entire construction project, managing all aspects from start to finish, including coordinating subcontractors, obtaining permits, and ensuring compliance with building codes and regulations. Subcontractors, on the other hand, focus solely on their specialized area of work and are responsible for completing their specific tasks according to the project's plans and specifications.

Subcontractors face extensive payment cycles, as they cover all labor and material costs upfront for a project yet receive payment last. Progress billing further complicates the matter, mandating that GCs only reimburse subcontractors based on project completion percentage. This system requires subcontractors to invoice GCs every month for the work completed, which exposes them to various factors that can delay progress billing further. These include:

• using the wrong pay application form, 
• missing documentation, 
• lien waiver oversights, 
• submitting pay apps through the wrong GC portal, 
• general project delays and disputes, or 
• the GC’s own cash flow issues.

As a result, most subcontractors wait about 90 days to get paid for the work they’ve already done, which can strain their cash flow and hamper their ability to take on new projects or pay their employees and suppliers.

This is where Siteline comes in. Siteline is a construction billing solution built specifically to streamline the subcontractor A/R workflow. With Siteline, trade contractors can easily generate and submit detailed pay apps tailored precisely to each GC's requirements. The platform also:

• tracks all compliance requirements and stores pertinent documents;
• tracks, collects, and submits lien waivers for the sub and their lower tiers; 
• ensures approved change orders are incorporated into the schedule of values; 
• provides full visibility into billing statuses across projects—including which GCs pay fastest to better anticipate cash flow; and
• creates accurate billing projections to monitor progress and effectively manage backlog.

By eliminating manual spreadsheets and centralizing all billing data, Siteline helps trade contractors accelerate their payment cycle by an average of three weeks. Discover how Siteline can get your subcontracting business paid faster by scheduling a demo today.