Payment delays disrupt cash flow, delay new projects, and create unnecessary stress for credit professionals. For suppliers and subcontractors in construction, it’s not just about waiting for a client to process an invoice—it’s about being proactive from the start to protect cash flow and ensure timely payments.
If you’re tired of waiting for payments or dealing with avoidable roadblocks, there are practical steps credit teams can take. By making sure all documents are in order, communicating effectively, and aligning with client processes, you can accelerate the payment timeline and avoid common pitfalls.
Here’s how credit professionals can help their company get paid faster and more consistently.
Timely Submission of Documents Keeps Cash Flow Moving
One of the most common reasons for payment delays is late or incomplete paperwork. If invoices, lien waivers, or other documents aren’t submitted on time, you’re running head-on toward delays that could have been avoided.
The Ripple Effect of Delayed Documents
When a general contractor is managing multiple suppliers and subcontractors, any delay in documentation can cause a ripple effect. Payments get pushed back, projects fall behind, and it becomes harder to collect what’s owed. Submitting late often means the client will move your company to the bottom of the payment queue.
Maximize Tools to Establish A System
Systematically track submission deadlines for invoices, lien waivers, and other critical paperwork–doing this piecemeal will be disastrous and difficult to troubleshoot.
For simpler operations, systematizing the process of tracking documents and submissions could be as simple as setting calendar reminders. For suppliers and subcontractors dealing with complex and multiple projects, a feature-rich payment compliance solution is beneficial.
A solution like Handle, which tracks deadlines and status for invoices, payments, and submissions with features like alerts and automated follow-ups and delivery, can help de-clog the process and free up time to deal with complex issues when deadlines are approaching.
Practical Tip: Aim to submit documents a few days before the deadline so your team can fix errors and handle last-minute requests without risking payment delays.
Billing for Completed Work Avoids Client Disputes
Overbilling is a quick way to create friction with clients. Even if work is almost done, billing for more than what’s been completed can lead to disputes, payment holds, or, at worst, a loss of trust between the parties.
How Overbilling Creates Payment Delays
Clients will scrutinize an invoice if it doesn’t match the work they’ve observed on-site, triggering a back-and-forth that wastes time and causes payment delays.
How to Ensure Accuracy Before Billing
Before submitting an invoice, confirm that the work has been completed, approved, and signed off by field personnel or inspectors. Keep detailed records, including photos, progress reports, or official approvals, to support your billing and avoid disputes.
Practical Tip: Coordinate your billing schedule with the GC’s project milestones. Meticulously reviewing contracts and asking questions at the beginning of the project makes this an easier task. Ensuring both sides agree on what’s been completed before submitting the invoice becomes easier. When everyone is on the same page, payment delays caused by misunderstandings are prevented.
Going Digital Speeds Up the Payment Process
Using manual, paper-based systems will introduce unnecessary delays. In construction, where payment cycles are already lengthy, lost invoices or clerical errors compound the issue. Digitizing and automating tasks that are repetitive and prone to error will mitigate many of these challenges.
Why Digital Tools Outperform Paper-Based Systems
Digital invoicing and lien waiver systems allow for faster submission, reduced errors, and real-time tracking of payment statuses. The responsibility of tracking deadlines and ensuring submissions are made on time becomes easier and more straightforward. Especially when payment approval processes differ between clients, ensuring that documents go out on time makes getting paid faster.
How to Transition to Digital Platforms
Adopt invoicing software or digital payment platforms to streamline processes. Many clients or GCs already have preferred systems, so ask during onboarding and integrate with their workflow. Make sure that you are familiar with the formats they accept. To optimize this further, choose a payment compliance solution with a baked-in payment feature that allows clients to pay conveniently.
How Client Systems Can Impact Your Payments
Each client has a process for approving payments. If your invoices don’t align with their requirements—whether they’re missing PO numbers or incorrect formats—they may reject or delay them. The more you understand their process, the smoother your payments will be.
Align Your Invoicing Process with the Client’s AP System
During onboarding, ask your client about their payment system. Find out how they handle invoicing, approval, and payment release. Make sure your invoices include everything they need to approve payment quickly.
Practical Tip: If your client uses an online portal to manage accounts payable, ensure you’re properly registered and familiar with the process. It’s key to avoid technical issues that could delay payments.
Keep Compliance Documents Updated to Avoid Payment Holds
Letting your insurance, licenses, or certifications expire is an easy mistake but one that can cost you dearly. Notices, waivers, and other documents that protect your right to get paid must be sent according to the requirements of the law to continue to protect your right to get paid. If a client discovers that your compliance documents are no longer valid, they may legally withhold payment until you update your records.
Expired Documents Can Halt Payments
Expired compliance documents aren’t just a bureaucratic issue—they’re a contractual requirement. Clients can’t (and often won’t) pay you if your paperwork is out of date, and they may even pull you off the project, which is a much bigger problem.
How to Keep Compliance in Check
Stay on top of your compliance documents. Use a document management system. Don’t wait until the last minute—renew them well before they expire.
Practical Tip: Be proactive. Submit updated compliance documents before the client even asks for them. Kicking off your own compliance workflow for each contract keeps everything on track. Submitting proactively also shows that you’re on top of your game, reducing the chances of delays.
Consistent Communication Keeps Payments on Schedule
Clear and consistent communication is the foundation for a smooth payment process. Don’t wait until there’s a problem—be proactive in informing your clients or GCs about project progress, compliance, and any potential payment issues.
Poor Communication Leads to Payment Delays
Many payment delays happen whenever one party doesn’t have all the information. If your client is unclear about the work you’ve completed or is waiting for missing documents, they may hold up your payment without even telling you.
How to Improve Communication
Schedule regular check-ins with your client or GC to review project milestones, discuss upcoming invoices, and address compliance issues. Regular communication allows you to clear up misunderstandings before they become payment problems.
Practical Tip: Even if things are going smoothly, send regular updates via email. It shows professionalism and keeps your work top of mind for the client, making it harder for them to overlook or delay your payment.
Negotiating Clear Payment Terms Minimizes Disputes
Many payment issues can be traced back to vague or poorly defined contract terms. If your payment schedule or conditions are unclear, you’re setting yourself up for potential delays. Taking time to negotiate clear terms upfront can save you a lot of hassle later.
How Ambiguous Terms Cause Payment Delays
A contract that leaves room for interpretation—whether about payment milestones, retainage, or performance-based clauses—opens the door to delayed payments. Clear terms make it harder for clients to delay payments without a valid reason. Coordinate with sales and legal to ensure no problematic or non-compliant clauses are included. A section in your credit policy should reference what needs to be included in contracts to protect your payments and what to watch out for.
Tips for Negotiating Strong Terms
Before signing any contract, make sure it outlines specific payment schedules, project milestones, and conditions for withholding payment. Don’t hesitate to ask for clarification or revisions if anything is unclear.
Practical Tip: Always include a clause encouraging prompt payment and requiring compensation if the payment schedule isn’t respected, such as penalties or interest for late payments. Conversely, incentivizing early payments through discounts can serve as a deterrent for delays.
Take Control of the Payment Process
Timely payments don’t just happen—they’re the result of clear communication, organized processes, and proactive action. By submitting documents on time, keeping compliance up to date, and using digital tools, you can drastically reduce payment delays and keep your cash flow healthy.
Don’t let payment delays disrupt your workflow. Take control by implementing these proactive steps now. The more you streamline the payment process, the better you can focus on what truly matters—managing risk, maintaining cash flow, and supporting business growth.