A recent survey found that 92% of subcontractors had to float payroll from their own pockets during the past year while waiting for payment, with 28% doing so most months. The survey, which included 492 construction finance and operations professionals, was conducted in May 2026 by Siteline.
The report, titled The State of Subcontractor Billing in 2026, highlights the significant cash-flow risk that subcontractors carry while waiting to get paid for completed construction work.
Retainage and Payment Delays
Retainage is a major source of payment delays, with 43% of subcontractors reporting that they wait more than 90 days to collect final payment and retainage. This can leave substantial amounts of working capital tied up in active and completed work.
According to the report, extended payment periods can leave contractors carrying the cost of labor, materials, and other project expenses well after their work is complete. Martin Press, Founder and President of Press Mechanical Contractors and Secretary/Treasurer of the American Subcontractor Association (ASA), noted that retainage puts subcontractors in a difficult position.
Related: Legionnaires’ Disease Outbreak Strikes Upper East Side
“Retainage keeps us from money we’ve already earned while we still have employees, suppliers, and vendors to pay,” Martin Press said. The ASA is working to expand options such as retainage bonds that give subcontractors access to those funds sooner.
Billing Errors and Payment Delays
The report also identifies internal billing processes as an area where subcontractors can reduce payment delays. Respondents named pay applications submitted with errors or omissions as the biggest internal driver of their own late payments.
Preparing and tracking pay applications consumes substantial staff time, with 67% of subcontractors spending 11 or more hours per month on this task. Mechanic’s lien deadlines present another risk, with 56% of respondents saying they had missed a critical deadline during the past two years.
Claire Wilson, Co-Founder and CEO of Siteline, noted that subcontractors have become the construction industry’s bank, and it’s a role no one asked for. Claire Wilson said that the better handle subcontractors have on their billing and accounts receivable management, the less time and money they lose to delays they can prevent.
Related: Louisiana Plumbing Reform Raises Health Concerns
Opportunities for Improvement
Despite the ongoing cash-flow pressures, 73% of subcontractors surveyed said they are optimistic about their financial outlook. A majority also indicated they are prepared to invest in tools that can help improve their financial operations.
The report examines where payment delays begin, the costs they create for trade contractors, and the steps subcontractors can take to narrow the gap between completing work and collecting payment.
Subcontractors can take steps to manage their cash flow by improving their billing and accounts receivable management processes. This can help them reduce payment delays and minimize the risk of missing critical deadlines, such as mechanic’s lien deadlines.
