In our last post, we looked at how the data center boom is pulling workers and wages away from contractors in Georgia, Texas and Virginia. This post is about the other thing it strains: your cash.
Say you land a big electrical or mechanical subcontract on a data center campus. You hire, and you pay those crews every Friday. You buy materials and pay your suppliers on their terms. Your billing goes to the GC, and the GC folds it into its own billing to the owner. The first check for that work arrives weeks later, and later still if your billing comes back with a question.
Even if you don’t build data centers, you may be picking up the work other contractors left behind to chase them. Either way, your backlog grows, and a bigger backlog isn’t cash in the bank. The more work you carry, the more money sits between what you’ve spent and what you’ve been paid.
A quick word on terms. In this post, “progress billing” means the package you send each month to get paid for the work completed. Many GCs and owners call it the “pay app,” short for payment application. Here in Massachusetts and in New York, you’ll often hear it called a “requisition.” Same package, different names.
Who your billing goes to, and when
Every month, your billing has to reach whoever approves it. If you’re a sub, that’s the GC. If an architect or engineer is running the contract, it’s them. On design-build and many private jobs, it’s the owner or the owner’s representative.
Each contract sets its own deadlines. Under the widely used AIA general conditions, for example, your billing has to reach the architect at least ten days before each payment date. Subs often face an earlier cutoff, because the GC has to fold their billing into its own. On a big job with many trades, missing the GC’s cutoff can push your payment back a full month.
State law matters too. Here in Massachusetts, for example, the prompt pay law covers private jobs of $3 million or more. It gives the owner 15 days to approve or reject your billing and requires a written reason for any rejection. It also requires payment within 45 days of approval, and a billing that isn’t answered in time is treated as approved. Check what your state and your contract say. Those rules only protect you if your billing goes in complete and on time.
Retainage: money you’ve earned but can’t use yet
Retainage is the part of each payment the owner or GC holds back until later in the job. It commonly runs 5% to 10%, but your contract and state law control it.
On data center-sized contracts, that adds up fast. On a $5 million subcontract, 5% retainage is $250,000 you’ve earned and can’t use; at 10%, it’s $500,000. Getting that money into your pocket is one of the biggest steps in managing your cash flow. That means tracking retainage on every job, and finishing each job quickly, efficiently and to a quality the owner is happy with, so the punch list closes fast and the retainage is released in full.
Three places cash gets stuck
1. Billings that come back. A missing lien waiver or a schedule of values that doesn’t match the approved change orders can get a billing returned. Every returned billing restarts the clock.
2. Extra work that never gets billed. On a fast-moving job, it often starts with an RFI. The answer changes the scope, the crew does the work, and someone means to write it up. But only a signed change order can be billed. Until it’s signed, that money is a promise, not a receivable.
3. Money owed that nobody is tracking. Past-due payments, retainage waiting at closeout, and work you’ve done but haven’t billed yet. When nobody owns the list, the money sits, sometimes for months.
How a Digital Assistant helps
Think of a Digital Assistant as an extra set of hands for your office. It’s software that takes on the tedious, repetitive parts of the work: finding the numbers, cross-checking them and lining them up on the right form. It’s the kind of technology you may have heard called “agentic AI.” Your team reviews the results, fixes anything that needs fixing, and signs off. Your people stay in charge; they just stop spending their days on legwork.
For getting paid, these Digital Assistants help most:
Keeping your billing on schedule. Our Money Management assistants draft your monthly billing on AIA G702/G703 forms from your updated schedule of values, ready for your review. They track the status and deadline of every billing and warn you before one misses the GC’s cutoff. They also track lien waivers and the retainage owed on each job.
Turning RFIs into billable work. An RFI Management assistant logs every RFI, tracks who owes an answer, and flags answers that change the scope. That way extra work becomes a change order request right away instead of a memory at month-end.
Catching money before it slips away. Money Management also flags change orders that haven’t made it into your budget yet, so extra work doesn’t get lost on its way to a billing. Our Executive Insights assistants add a Monday-morning briefing: billing status and underbilling by project, in plain language.
Answering questions from your own files. Ask, “What are the retainage terms and billing cutoff on the data center job?” or “What did we do the last time a GC rejected a requisition?” A knowledge base assistant finds the answer in your own contracts, vendor agreements, past jobs and standard procedures, so your team spends minutes instead of an afternoon digging through files.
And if your office has a task that isn’t listed here, we build custom Digital Assistants for that too.
How you’d know it’s working
- Fewer billings come back.
- Less time passes between your billing date and money in the bank.
- No signed change orders sit unbilled at month-end.
- Your team finds contract answers in minutes instead of digging through files.
Ready to talk?
Start with a 15-minute conversation. We’ll ask how your billing runs today and where it gets stuck, then tell you honestly whether a Digital Assistant would help. There’s no pitch. You’ll find the contact link at the top of every page.
Sources: AIA A201-2017, General Conditions of the Contract for Construction, §9.3.1. AIA A401-2017, Standard Form of Agreement Between Contractor and Subcontractor, §11.1. Peckar & Abramson, “Retainage: What Contractors Need to Know,” May 16, 2024. Massachusetts General Laws c.149 §29E.