Net-30 payment terms mean you wait 30 days after invoicing to get paid. In practice, many subs wait 45, 60, or 90 days, and some never see the full amount. The fix is not patience. It is a system: negotiate better terms before you sign, manage your cash position while you wait, and know exactly what to do when a general contractor payment delay turns into a real problem.
If you are a net-30 subcontractor grinding through slow-paying GC cycles right now, this guide gives you the steps to stop bleeding cash and start getting paid like your work is worth something. Because it is.
Key takeaways
- Net-30 terms are negotiable. Most subs never push back, and most GCs will move if you ask correctly.
- A float buffer of 60 days of operating costs is the minimum target to survive standard subcontractor cash flow gaps.
- Lien rights are your strongest leverage. File preliminary notices on every commercial job, no exceptions.
- Late payment laws exist in most states. A slow-paying GC may owe you interest without knowing you know that.
- Invoicing speed matters. Every day you delay sending an invoice adds a day to the back end of your wait.
What does net-30 actually cost you?
Net-30 is a payment term meaning the GC has 30 calendar days from invoice receipt to cut your check. That sounds reasonable until you do the math on a real job.
Say you are a plumbing sub on a 12-unit apartment build. Your rough-in labor and materials run $38,000. You finish rough-in on May 1 and invoice the same day. Under net-30, you should see $38,000 by June 1. But the GC does a pay-app cycle on the 15th of every month. So your May 1 invoice misses the April 15 cutoff and rolls to the May 15 app. Add 30 days for processing and you are looking at June 15 at the earliest. That is 45 days of float on $38,000, and you still bought pipe and paid your guys in May.
Multiply that across two or three overlapping jobs and you are carrying $80,000 to $120,000 in receivables while your credit cards and supplier accounts pile up. That is how solvent subcontractors go broke.
What tools do you need before you start?
These are not optional. Before you take another net-30 job, make sure you have all of these in place.
- A written subcontract or purchase order with specific payment terms, not just "net-30"
- A lien rights calendar tracking preliminary notice deadlines by state and project
- A cash flow spreadsheet showing your 60-day forward look at money in and money out
- A line of credit or material financing account with at least one supplier
- Invoice software that timestamps delivery and tracks outstanding balances
- Your state's prompt payment statute pulled up and bookmarked (most states have one)
None of these cost much. All of them have saved subs serious money.
Step 1: Negotiate terms before you sign, not after
This is where most subs leave money on the table. They accept the GC's boilerplate contract without reading the payment section, then spend the next six months chasing checks.
Here is how to push back the right way. When a GC sends you a sub agreement with net-30 terms, respond with a counter before you sign. Ask for net-15, or ask for a 10% mobilization deposit upfront to cover your first material buy. Phrase it simply: "I can hold this schedule, but I need net-15 terms or a mobilization draw to keep materials moving. Which works better for you?"
Most GCs will negotiate. They want you on the job. A GC who refuses any movement on payment terms before the project starts is showing you exactly how the job will go once your work is in the wall.
If you cannot move the net-30 term, get these clauses added to the contract instead:
| Clause | What it does |
|---|---|
| Prompt payment pass-through | Ties your payment to owner-to-GC payment, with a hard backstop date |
| Interest on late payments | Specifies a daily or monthly rate (1.5% per month is common) |
| Dispute carve-out | Late payment due to billing disputes does not delay undisputed amounts |
| Pay-app submission schedule | Locks in exact dates so "we haven't billed the owner yet" is not an excuse |
Get these in writing. A verbal agreement from a GC project manager is worth nothing when the accounting department is holding your check.
Step 2: Invoice fast and invoice right
Subcontractor cash flow problems often start at the sub's own desk. Every day you wait to send an invoice is a day added to your wait.
Invoice on the same day work is complete or on a fixed weekly cycle, whichever comes first. If the GC uses a pay-app process, submit your numbers 48 hours before their cutoff, not the day of. Missing a pay-app window by one day can cost you 30 days.
Your invoice must include:
- Project name and address
- Your contract number or PO number
- Itemized description of work completed
- Stored materials on site (if your contract covers this)
- Previous billings and amount remaining
- A clear "payment due by" date calculated from the contract terms
Send it by email and confirm receipt. A GC who says "we never got your invoice" is a common delay tactic. Timestamps kill that excuse.
Step 3: Build a cash buffer before you need it
A cash float buffer is a cash reserve equal to at least 60 days of your average operating costs, held separately from your project money. This is not a rainy-day fund. It is your operating engine while receivables are in transit.
For a small electrical sub with $25,000 a month in payroll, materials, and truck costs, that buffer is $50,000 minimum. Yes, that is a significant number. It is also the difference between making payroll in week six of a slow-paying project and not making payroll.
Build the buffer through these moves:
- Negotiate 30-60 day payment terms with suppliers. Many will give you net-30 on materials if you ask and have a solid history. You are essentially borrowing the supplier's money interest-free during your wait.
- Open a business line of credit before you need it. Banks lend to businesses that do not need the money. Apply during a good revenue quarter.
- Keep a hard line between project money and operating money. A separate checking account for each active project prevents you from accidentally spending one job's materials budget on another job's payroll.
Step 4: When the GC pays late, escalate in order
A general contractor payment delay is not automatically a crisis if you handle it in sequence. Most late payments resolve at step one or two. Few make it to step four.
Step 1: Friendly follow-up at day 31. Send a short email. "Invoice [number] for [project] was due on [date]. Please confirm the payment status." Keep it professional. Accounting departments lose paperwork. This fixes most of them.
Step 2: Direct call at day 38. Call the GC project manager, not accounting. Ask specifically when the check is cutting and get a date. Write it down, and follow up by email to confirm the conversation.
Step 3: Formal written demand at day 45. Send a letter referencing your contract terms, the invoice, the due date, and any interest accruing under your contract or your state's prompt payment statute. State clearly that you are evaluating your options. This letter starts the paper trail you will need if this escalates.
Step 4: File or threaten to file a mechanics lien. A mechanics lien is a legal claim against the property that clouds the title and blocks the owner from refinancing or selling until the lien is resolved. Most GCs will find your money fast when a lien hits the project. Know your state's deadlines. For most commercial projects, you must file a preliminary notice within 20 to 30 days of first furnishing labor or materials, or you lose lien rights entirely.
Step 5: Consult a construction attorney. If the amount is above $10,000 and the GC is stonewalling, an attorney's demand letter often moves things faster than any amount of phone calls. Many construction attorneys offer a free first call.
Step 5: Protect the next job before you finish this one
The best time to fix your subcontractor cash flow problem on a future job is right now, while you are living through the current one. Document everything you wish you had done differently. The clauses you did not ask for. The GC who moved slowly. The invoice you sent late.
Then build a one-page internal checklist: what you require before mobilizing on any new project. Payment terms reviewed and signed. Preliminary notice filed or calendared. Supplier terms confirmed. Mobilization deposit, if required, received.
That checklist is worth more than any contract template you can buy online.
Frequently asked questions
Can I stop work if a GC hasn't paid me?
You can, but do it carefully. Most subcontracts require written notice before you suspend work, often 72 hours or more. Check your contract language first. Stopping without proper notice can put you in breach, which gives the GC ammunition to withhold payment entirely. Send written notice citing the unpaid invoice, reference your contract terms, and state a specific date after which you will suspend operations.
What is a mechanics lien and how fast does it work?
A mechanics lien is a legal claim filed against a property that secures your right to payment from the asset itself, not just the GC. Once filed, it clouds the property title, which creates serious problems for owners trying to sell or refinance. GCs know this. In most cases, a properly filed lien or even a credible lien threat produces payment within two to three weeks. Deadlines vary by state, so look yours up before starting any new job.
Should I require a deposit on every job?
On jobs over $15,000, yes. A 10% mobilization deposit covering your first material buy is a reasonable ask. It also functions as a screening tool. GCs who refuse any deposit on a large job, or who react with outrage to the request, are flagging their own cash position. A GC who cannot front 10% often cannot make payroll on their end either.
What is a prompt payment statute?
A prompt payment statute is a state law that sets deadlines for payment down the construction payment chain, from owner to GC to sub. Most states have one. Many include automatic interest penalties for late payment, often 1% to 2% per month, and some allow you to recover attorney fees if you have to sue to collect. Look up your state's construction prompt payment law. It is probably stronger than you think.
How do I deal with a GC who pays everyone net-60 or net-90 but calls it net-30?
First, stop accepting verbal assurances. Get the actual payment history of any new GC from subs who have worked with them before. Ask around at the supply house. If a GC's actual payment cycle runs 60 to 90 days, price your work to reflect the carrying cost of that float, or decline the job. Your invoice rate should account for the real cost of money, not the theoretical one.
What if the GC blames the owner for the delay?
This is a "pay-when-paid" situation. Some subcontracts contain pay-when-paid clauses, meaning your payment is conditioned on the GC first receiving payment from the owner. These clauses are enforceable in many states but not all, and courts interpret them narrowly. If your contract has this language, push to add a hard backstop date, something like "in no case later than 60 days from invoice." That converts it from a conditional payment to a deadline.
Is it worth using invoice factoring to speed up cash flow?
Factoring is a tool, not a solution. An invoice factoring company buys your receivable at a discount, typically 2% to 5% of the invoice value, and pays you within 24 to 48 hours. On a $40,000 invoice, you lose $800 to $2,000. That cost stings, but it can be cheaper than a line of credit draw or a missed payroll. Use it selectively, on large invoices from verified GCs, not as a permanent fix for poor payment terms.
Surviving net-30 as a subcontractor is not about working harder or waiting longer. It is about building a system: better contract terms, faster invoicing, a real cash buffer, and a clear escalation path when a GC drags their feet. That system takes a few hours to build and pays back every month. If chasing invoices and tracking payment dates is eating into time you should be spending in the field, Krue was built for exactly that: helping contractors send estimates faster, invoice on the spot, and follow up on payments without the paperwork pile.
