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Trade Contractor
What is a Trade Contractor?
AA trade contractor, also known as a subcontractor, is a specialized construction professional hired by a general contractor (GC), construction management property, owner, developer, or other entity to complete specific aspects of a construction project. Trade contractors 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 to be performed, deadlines, and terms of payment.
Trade contractors are distinguished from GCs in several ways. GCs oversee the entire construction project, managing all aspects from start to finish, including coordinating trade contractors, obtaining permits, and ensuring compliance with building codes and regulations. Trade contractors, 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.
Trade contractors 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 trade contractors based on project completion percentage. This system requires trade contractors 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 trade contractors 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.
Trusted by trade contractors across the country
Other construction terms
What is ASC 606, Revenue from Contracts with Customers?
ASC 606, Revenue from Contracts with Customers, is an accounting standard that provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries. For the construction industry, it has substantial implications as it changes how and when revenue from contracts is recognized. Under this model, construction companies recognize revenue by transferring promised goods or services to customers in an amount that reflects the consideration they expect to receive. ASC 606 can affect a construction company's financial statements, operations, and tax obligations. It demands that companies disclose more detailed revenue and contract information than before. Therefore, understanding ASC 606 is critical for construction industry stakeholders to assess a company's performance and future prospects accurately.
What is a G703?
A G703 is a continuation sheet used in the construction industry. It's part of the AIA (American Institute of Architects) document set for contract documents. The G703 form includes a schedule of values listing portions of the work, scheduled values, work completed, materials stored, total completed and stored, percentage of work completed, balance to finish, and the amount of change orders. Hence, it is primarily used for breaking down the contract sum into portions of work in accordance with a schedule of values prepared by the contractor. It provides a running total of completed work and can be updated as work progresses.
What is Depreciation?
Depreciation in the construction industry refers to the decrease in value of a building or infrastructure over time due to natural wear and tear, damage, ageing, or obsolescence. It's a concept that pertains to accounting and fiscal management within the construction sector. Recognizing depreciation is crucial for construction companies as it can be used for tax benefits and to predict future costs. Depending on the method used, which can be straight-line, declining balance, or sum-of-years digits, the annual depreciation expense can be calculated. Hence, understanding depreciation is key to a construction company's financial planning and strategy.
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