A few weeks ago I wrote about cash being king and how critical it is to get paid on time.

Today I want to flip that around. Because the contractors who pay their subs and suppliers on time? They deserve to be treated like royalty. They deserve the best pricing on every single job. Better than the ones who don’t pay on time.

I know what you're thinking: "We pay on time. At least we try to."

That's not always the case. And here's why it matters more than you think.

The Reality Behind the Paperwork

People are busy. Mistakes get made. There's a mountain of paperwork, tickets, and approvals behind every payment that can hold things up for weeks.

I've been on both sides of this mess.

I've had subs refuse to show up for jobs until they got paid for completely unrelated work I wasn't even associated with. They literally wouldn't come to the job site. $15M project dead in the water because of someone else's slow payment.

I've also approved invoices and then watched them sit in accounting limbo for months. It destroyed our reputation. Really hurt our relationships with people we'd worked with for years.

The damage goes both ways.

The Front-Loading Strategy

Here's how the best contractors handle this:

Front-load your bids aggressively. Get overbilled to owners as the prime so you have the cash flow to pay your partners promptly.

Let the owner finance the job, not you. And certainly don't make your subs and suppliers finance it.

Make the extra effort to pay within the actual contract terms - 30 days for suppliers, 5-7 days after you get paid for subs, and (usually) weekly for truckers.

The Weekly Payment Discipline

Set aside specific time every week to review and approve invoices. Not at month-end when everyone's scrambling. Weekly.

It's not cool when your concrete supplier needs to get paid and the PM is procrastinating on approvals. Some things just have to get done, and this is one of them.

Build a fast, tested approval process that's heavily digitized but still puts final approval in the hands of your project team. They know the work best - whether that concrete pour actually happened, if the quantity is right, if the quality was acceptable.

Your PM and superintendent should be able to digitally approve invoices from the field. No more waiting for someone to get back to the office to sign papers. No more invoices sitting in email inboxes for days.

But keep the human element. The project team needs to verify the work was done properly before anyone gets paid.

Manage your subs. Make sure they don't get sucked into extra work without change orders. They need your guidance - don't lead them into financial traps.

When Disputes Arise

There will be disputes. That's normal.

Handle them professionally. Involve your legal team if necessary, but honestly? Lawyers often do more harm than good on payment issues. If you can work it out fairly without the legal fees, just do it.

I'm not saying roll over or pay for work that wasn't done properly. Never do that. But when someone does good work right, they should get paid on time.

The Human Side

These subs and suppliers? Most are private or family businesses. They're the backbone of our industry and our country. Don't string them along.

I've watched subs nearly go broke waiting for payment. It's heartbreaking.

Everybody knows who pays and who's a slow payer in their market. You're thinking of them right now. Don't be on that list.

The Walk Down Main Street Test

Here's what it feels like when you pay on time: You can walk down any street in your market without worrying about who you see coming the other way.

No awkward conversations. No avoiding eye contact. No "Hey, about that invoice from three months ago..."

Instead, people want to work with you and give you preferred pricing and terms. They’ll call you about upcoming jobs to partner on. They want you to win jobs because they know you'll do right by them.

When You Have to Make the Call

Every once in a while, you face a tough decision.

The owner hasn't paid you yet - maybe they're slow, maybe there's a dispute, whatever. But you've got a smaller sub who's really hurting because it's holding up their payment.

You know it's not their fault you haven't been paid yet.

I've been there. Less than a handful of times in my career, but when I could afford it, I broke the terms and paid the sub anyway. Had to go to bat with my boss to get approval.

Eventually we got paid by the owner, and those subs never forgot what we did. That's partnership. That's showing someone you're not just out for yourself.

The Karma Factor

Construction is a business full of karma. What goes around comes around.

Be firm but fair. Hold people accountable for quality work. But when they deliver, pay them promptly.

The contractors who master this sleep great at night. Their phones ring first when good subs have openings. They get better pricing because people trust them.

That's not just good business. That's competitive advantage.

Pay on time. Your reputation - and your bottom line - depend on it.

Thanks to our friend and loyal reader SP for suggesting this topic. Got an idea for a future newsletter? Hit reply and let us know.

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About the Author

Tristan Wilson is the CEO and Founder of Edgevanta. We make AI agents for civil estimating. He is a 4th Generation Contractor, construction enthusiast, ultra runner, and bidding nerd. He worked his way up the ladder at Allan Myers in the Mid-Atlantic and his family’s former business Barriere Construction before starting Edgevanta in Nashville, where the company is based. Reach out to him at [email protected]