Guess what 91% of construction companies get? Hint: these are not on-time payments.


Late payments may be another byproduct of the pandemic. Only 11% of construction companies say they are always paid in full, which is a decrease of 74% from 2020 and a decrease of 82% from 2019. In addition, only 9% of companies report always being paid on time. , a drop of almost 60%. of the previous year.

That’s according to a survey conducted by Levelset, a construction software company that aims to help contractors and suppliers simplify their finances. The company released the 2021 Construction Cash Flow and Payments report, based on a survey completed by 764 construction professionals to explore the challenges facing players in the construction industry.

Being able to reliably predict and manage payments is important for all businesses, but it is especially difficult for the construction industry, according to the study. “The reliability of payments was down even before the pandemic, and construction companies reported a sharp drop in 2021.”

Over the years, the numbers continue to drop. The report explains that each construction project among different sectors is treated differently “Residential construction companies are up to four times more likely to consistently receive payments in full and on time than their counterparts in commercial and public construction. “

According to the findings, “General contractors are at least four times more likely to be paid within 30 days than subcontractors and suppliers. For 1 in 5 sub-thirds, collection times regularly exceed 60 days.

The report explains that there is a cash flow gap on different companies, due to the fact that the industry is “credit heavy”. After 40 days, according to Levelset, 20% of businesses have negative cash flow, paying subcontractors, suppliers and vendors once without collecting the payment needed to cover costs. Alternatively, around 48% of all construction companies report relatively healthy profits, with margins on a typical project exceeding 10%.

Homebuilders outperform their counterparts in terms of speed of collection – home builders are three times more likely than commercial contractors to receive payment within 30 days of billing and five times more likely than those in public projects .

Positively, the survey found that over the past year construction companies have invested in technology and digital solutions to adapt to remote working. Although they have relied heavily on physical paper documents in the past, more and more companies are moving towards electronics. The study shows that “83% of construction companies have the ability to accept electronic payments… 79% say it has helped their business get paid faster.


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