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The Cost of Payment Delays
Siteline's new State of Subcontractor Billing in 2025 report underscores a hard truth: no matter how you spin it, payment delays are costly. This is the time value of money in action—the idea that a dollar today is worth more than a dollar tomorrow because it can be put to work immediately. Research shows that invoices that are 90 days past due are only worth about 70 cents on the dollar.
Imagine two identical $100,000 projects with 15% margins. Project A pays in 30 days, while Project B pays in 90. On paper, both generate $15,000 in profit. In reality, the 60-day lag on Project B forces the contractor to cover payroll, materials, and new jobs. Financing that gap at an 8% annual interest rate costs roughly $1,300, nearly 9% of the project’s profit.
