Late payments cost subcontractors far more than most realize. Let's break down the true impact.
Direct Costs
Interest and Financing
When payments are late, you may need to:
Collection Efforts
Chasing payments takes time and money:
Indirect Costs
Cash Flow Disruption
Poor cash flow affects your ability to:
Opportunity Cost
Time spent chasing payments is time you could spend:
The Numbers
Studies show that:
What You Can Do
1. Use automated invoicing and follow-up tools
2. Implement payment prediction to identify risks early
3. Consider requiring deposits from new clients
4. Build relationships with reliable payers
5. Know your lien rights and use them when necessary
The technology exists today to dramatically reduce late payments. The question is whether you're using it.