What is Year-to-Date (YTD)?

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 Time and Materials Contract, often abbreviated as T&M, is a specific type of contract commonly used in the construction industry. It is a contractual format that indicates that the client will pay based on actual costs: the direct labor hours worked (time), the materials directly used in the final product, and a fixed add-on to cover overhead and profits. Unlike fixed-cost contracts, T&M agreements provide greater flexibility as the scope of work can change without having to negotiate a new contract. This type of contract is generally applied in projects where the full extent of the work cannot be determined at the outset. However, their major downside is the potential risk of cost overruns, which makes client oversight crucial.

A construction lender is a bank or financial institution that provides short-term financing specifically for construction companies, developers, and builders working on construction and development projects. In commercial construction, these lenders control project cash flow by deciding when and how much money gets released throughout a project. Instead of providing all funding upfront, they release funds in phases as work gets completed and milestones are hit, which affects everyone involved in the project—especially subcontractors.

Here's how it works for commercial subcontractors: the lender has to approve each payment before the general contractor gets their money, and only then can the GC pay their subs. This means subcontractors are essentially waiting in line behind both their GC and the lender's approval process, which can stretch out payment timelines well beyond what's written in their contracts.

Construction lenders also require extensive paperwork before releasing funds, including lien waivers from all project participants and current insurance certificates. If any documentation expires or goes missing, it can freeze the entire payment process. This means subcontractors must stay organized with their accounts receivables, match their progress billing to lender draw schedules, and keep track of compliance deadlines for themselves and any lower-tier vendors and suppliers.

Siteline streamlines these A/R workflows by centralizing lien waiver tracking and submission, helping subcontractors prevent costly payment delays caused by missing documentation. Learn more here.