Bill on time and accurately
When it may fit: Invoices are late or rejected.
Evidence needed: Billing calendar and rejection reasons.
Trade-off: Needs field-to-office coordination.
Construction Intelligence Brief
How to Investigate Delayed Payments and Receivables
Money owed is not money in the bank. Slow payment from owners and general contractors ties up cash that has already been spent on labor and materials.
1. The business problem
Who owes us money, how long have they owed it, and what is it costing us to wait?
Late payment is a chronic issue in construction. Disputes, paperwork, approval chains and cash-flow problems at the owner or general contractor all add days. Each day of delay is a day the contractor funds the job from its own resources.
Understanding receivables means looking at the age, the customer, the project and the reason for each slow balance.
2. What the evidence can reveal
A receivables investigation builds a picture of who pays when:
- Calculated Aging of receivables: current, 30, 60, 90 days and beyond, by customer and project.
- Calculated Days sales outstanding: how many days of revenue are tied up in receivables.
- Calculated Cost of delay: cash tied up multiplied by the cost of financing it.
- Information gap Reasons for delay: disputes, missing documents, owner approval, pay-when-paid terms.
Patterns by customer or project type show where to focus effort and where terms should change.
3. Investigate the problem
The synthetic contractor has no receivables data, so we use its scale to size the issue. Calculated Revenue recognized of $51.5M a year is about $141,000 a day. Each extra day of collection time ties up about that much cash. Ten extra days is about $1.4 million.
Calculated That is large against the $2.90M of gross profit the company earned. If the contractor financed the delay at, for illustration, 8% a year, the annual cost of ten extra days of receivables would be about $113,000. Illustrative The rate is an assumption, and the arithmetic is $1.41 million multiplied by 8%.
Hypothesis Receivables risk tends to build on the projects growing fastest, because more billing means more balances outstanding. Maple Street Apartments grew recognized revenue 43.0%, so its balances would be the first to review. Information gap Aging, payment terms and dispute records are needed to confirm. A weekly aging report with a short list of balances over 60 days is the standard discipline.
4. Explore the interactive experience
Investigate it yourself.
Project Performance Dashboard: a project portfolio dashboard with estimated final margins, a scenario simulator for change orders and costs, evidence-linked answers from APIS, and a sample brief, all on synthetic data.
The experience below is built on a synthetic contractor, “Demo Builders Inc.” It has no cash, receivables or retainage data, so it is used to show the project and margin side of the picture. Nothing in it is real.
- Select Maple Street Apartments, the fastest-growing project. Why might its receivables deserve attention first?
- Look at revenue recognized on the dashboard. Divide it by 365 to see the cash tied up by each extra day.
- Ask APIS what additional information would help validate these conclusions.
5. Evaluate possible solutions
Faster collection comes from process, terms and relationships.
6. What leadership should do next
Questions to answer
- Which balances are over 60 and 90 days?
- Which customers pay slowly?
- What causes each delay?
- What does the delay cost?
Data to gather
- Receivables aging
- Contract payment terms
- Dispute log
- Billing records
Steps to take
- Run aging weekly.
- Assign an owner for each large balance.
- Fix recurring causes.
- Track days outstanding.
7. Engage Two Pillars
Improve Project Visibility and Financial Control
Two Pillars can help contractors investigate project portfolio, margin, estimating, cash-flow and operational performance using your own project data. A good first step is a receivables review that ranks balances by age, size and cause.
Sources and data notes
- The organization, its figures, and every number in this article and its interactive experience are synthetic and illustrative. They are not real data, a benchmark, or a forecast.
- Reviewed October 2026. This article describes an approach to investigation. It does not replace review by qualified professionals.