Subcontractors are the lifeblood of most construction businesses. Pay them on time and without hassle, and you become the first call when they have a free crew. Mess it up and word travels fast. Getting sub payments right is a core piece of cash flow management.
The Payment Schedule: Transparency is Key
The biggest source of conflict between GCs and subs is unclear payment terms. Put it in writing in every subcontract: weekly draw, Net 15, pay-when-paid, or whatever your model is. Then stick to it. A sub who knows they get paid every Friday shows up on Monday.
Documentation: Protect Yourself and Your Sub
Never pay a sub without the right paperwork. That means a signed subcontract, current insurance certificates, a W-9, and a lien waiver for that payment. Make sure you understand what coverage actually means in our contractor insurance guide. Keep the files organized so you can verify everything before you hit send on the payment.
Automating the Flow
Hand-writing checks on the hood of your truck is not a system. Use ACH, Bill.com, or your bank's bill pay to schedule payments and keep a record. Tie it to your project accounting so you can see what is billed, what is pending, and what is paid at a glance. When subs do extra work, make sure every change is documented and paid — see our change order guide.
Sub Payment Checklist
- Signed subcontract with payment terms.
- Current insurance cert, W-9, and any required bonds.
- Invoice matching the agreed scope.
- Lien waiver signed before money moves.
- Payment confirmation saved to the job file.
Happy subs make you money. Clear terms, clean paperwork, and on-time payments build the kind of relationships that get your jobs prioritized when schedules get tight.