What is Overhead Allocation?

A sworn statement is a legal document used in construction projects that lists all contractors, subcontractors, and suppliers providing labor or materials for a project. When signed, it serves as a sworn declaration that the information provided is complete and accurate, meaning the signer is swearing under oath that no parties other than those listed need to be paid for work on the project. 

Sworn statements include detailed financial information for each party, such as contract amounts, previous payments, current amounts due, and remaining balances. Because these statements are made under oath, providing false information can result in perjury charges.

For subcontractors, sworn statements create transparency in the payment process, ideally to help prevent payment disputes. They’re typically submitted alongside payment applications, especially when requesting final payment. While not required in most states, Michigan and Illinois mandate sworn statements for all construction projects, with Michigan requiring a specific standardized form. Submitting sworn statements proactively—even when not explicitly required—can build trust with general contractors (GCs) and often results in faster payments. However, accuracy is critical; any discrepancies with sworn statements can have the opposite effect—delayed payments and damaged relationships. Check out this blog post for more tips on managing sworn statements.

Siteline can simplify the sworn statement process through integrations with popular construction accounting systems like Sage 300 CRE, Sage 100, Sage Intacct, Spectrum, and Vista. These integrations automatically pull accounts payable (A/P) information to complete sworn statements and subcontractor affidavits accurately, preventing costly errors and delays. See for yourself—book a no-obligation demo of Siteline today.

Long-term liabilities, also known as noncurrent liabilities, in the construction industry are obligations that are due more than a year from the current date. They are an important part of a company's financial structure and may include bonds payable, long-term loans, deferred tax liabilities, lease obligations, and pension obligations. For example, a construction company might have long-term liabilities in the form of a multi-year loan taken to acquire new heavy machinery or land for future projects. These liabilities have a significant impact on a company's liquidity and overall financial health, so it's critical that construction companies manage them effectively. Depending on how these are managed, they can influence a construction company's creditworthiness and its ability to secure future funding for expansion or for carrying out large projects. Hence, understanding long-term liabilities is vital for sustainability and growth in the construction industry.

A prime contractor, also commonly referred to as a general contractor, is the main contractor responsible for managing an entire construction project. They are in direct contact with the build’s owner/developer and hold primary responsibility for the construction, execution, quality, and completion of the project under the agreed terms and schedules. As such, the prime contractor addresses concerns and resolves issues related to the project, contributing to the effective execution and timely delivery. The prime contractor also manages the procurement of materials, labor, and equipment, ensuring compliance with building codes and regulations.

A critical part of the prime contractor’s job is hiring and managing trade contractors, also known as subcontractors, who specialize in specific construction trades like electrical, plumbing, framing, etc. The prime contractor essentially acts as a hub, contracting out portions of the work to skilled trade contractors while retaining overall control of the project operations.

Prime contractors have a vested interest in working with subcontractors who not only are highly skilled in their respective trades but also have efficient, well-defined operational and financial workflows to ensure reliability and consistency in their performance. Streamlined billing processes are crucial in this regard. When subcontractors can quickly and accurately generate pay applications—complete with the necessary compliance documentation and lien waivers—it allows the prime contractor to bill the project’s owner promptly and get paid faster. Delays in subcontractor billing can significantly impede the prime contractor’s ability to get paid in time, thereby causing delays in payments to other contractors, too. 

This is where a solution like Siteline can ultimately benefit prime contractors by helping their subcontractors streamline billing processes. Siteline accelerates subcontractor billing by automatically generating pay apps per prime contractor specifications, tracking compliance requirements, managing change orders and lien waivers, and providing payment visibility. When subcontractors use Siteline to automate billing, prime contractors receive accurate, compliant pay applications faster, allowing them to bill project owners promptly and get paid quicker as a result.

See how Siteline can accelerate your construction billing cycle and get you paid faster by scheduling a demo today.