{"id":19088,"date":"2023-06-26T03:29:26","date_gmt":"2023-06-26T07:29:26","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=19088"},"modified":"2026-02-12T04:15:46","modified_gmt":"2026-02-12T09:15:46","slug":"6-cash-collection-tips-for-every-construction-business","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/6-cash-collection-tips-for-every-construction-business\/","title":{"rendered":"6 cash collection tips for every construction business"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/construction\/\" class=\"entry-header__link\">Construction<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\t6 cash collection tips for every construction business\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-06-26T03:29:26-04:00\">June 26, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"6 cash collection tips for every construction business\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/6-cash-collection-tips-for-every-construction-business\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author\">\n\t\t\t<div class=\"co-authors\">\n\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/robarkes\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2021\/03\/Q2-FY17-Sage-People-Picture-V2-350x350.jpg\" class=\"entry-author__image\" alt=\"\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2021\/03\/Q2-FY17-Sage-People-Picture-V2-350x350.jpg 350w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2021\/03\/Q2-FY17-Sage-People-Picture-V2.jpg 400w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Rob Arkes<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p>Cash flow is the lifeblood of your construction business. When it\u2019s healthy, you have the financial room to make growth-focused investments. When it\u2019s in trouble, you have no choice but to cover basic costs.<\/p>\n\n\n\n<p>To make sure there\u2019s always plenty of cash available, you need customers to pay you quickly and reliably.<\/p>\n\n\n\n<p>While this may seem out of your control, there are plenty of actions you can take to keep money flowing in.<\/p>\n\n\n\n<p>In this article, we share 6 tips to improve how your construction business collects cash:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"#invoice\">Invoice customers as fast as possible<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#automate\">Automate the time collection process<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#credit\">Set credit limits for customers<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#create\">Create an accounts receivable team<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#keep\">Keep customer credit cards on file securely or use a lockbox<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#collect\">Collect signatures on site and provide backup documentation<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"invoice\"><strong>Tip #1: Invoice customers as fast as possible<\/strong><\/h2>\n\n\n\n<p>The longer you take to send a customer an invoice, the longer you\u2019ll be waiting to get paid.<\/p>\n\n\n\n<p>In most construction businesses, a service person will gather information from customers while on site and send it back to the office. Then the office goes through a process of several steps to finally invoice the customer.<\/p>\n\n\n\n<p>Combine this with the average time businesses allow their customers to pay (which is up to 70 days), and the whole billing process takes way too long.<\/p>\n\n\n\n<p>To invoice faster:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Use technology that can complete all steps of the invoice process right there on site. That way, you can agree the service and price with a customer while you are with them and send them the invoice immediately.<\/li>\n\n\n\n<li>Make sure this tech can also calculate the right billing and tax rates based on the customer\u2019s contract.<\/li>\n<\/ul>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Learn how Sage Construction and Real Estate puts power into the hands of your people<\/h2>\n\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-us\/sage-construction\/customer-resources\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-19089\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Tell me more<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/06\/GettyImages-140872290-1440x810.jpg\" class=\"single-cta__image\" alt=\"construction workers\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/06\/GettyImages-140872290-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"automate\"><strong>Tip #2: Automate the time collection process<\/strong><\/h2>\n\n\n\n<p>Sending invoices with incorrect amounts is a common issue that delays payment.<\/p>\n\n\n\n<p>To avoid this, use a time and attendance solution that automates processes across both payroll and billing. By using tech that supports both, you eliminate the need for people to enter time in 2 places, which reduces the chances for error and saves a lot of time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"credit\"><strong>Tip #3: Set credit limits for customers<\/strong><\/h2>\n\n\n\n<p>Customers that continually rack up unpaid bills pose a risk to your cash flow. To prevent this from happening, there are a few practices to put in place:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Set and enforce credit limits for customers you\u2019re concerned about.<\/li>\n\n\n\n<li>Set a rule that prevents a customer from requesting additional service if they have already exceeded their credit limit.<\/li>\n\n\n\n<li>Do a credit check with DNB or a third party you trust.<\/li>\n\n\n\n<li>If you have doubts about a customer, check with other construction vendors they have worked with to find out if they pay on time.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"create\"><strong>Tip #4: Create an accounts receivable team<\/strong><\/h2>\n\n\n\n<p>No matter how big or small your business, it\u2019s always a good idea to have a person or team dedicated to accounts receivable. This means you\u2019ll always have eyes on your cash flow and someone responsible for key actions, like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Making sure statements are sent to customers on time.<\/li>\n\n\n\n<li>Following up with accounts who haven\u2019t paid on time.<\/li>\n\n\n\n<li>Monitoring and reporting on cash flow every month.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"keep\"><strong>Tip #5: Keep customer credit cards on file or use a lockbox<\/strong><\/h2>\n\n\n\n<p>To protect cash flow, keep customer credit cards on file and follow PCI compliance best practices. This allows you to charge for work without having to get customers on the phone.<\/p>\n\n\n\n<p>You can also use a lockbox to collect payments. This is a service that allows your customers to send payments directly to a special post office box. The bank then goes to the box, picks up the payment, and processes and deposits it directly into your bank account.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"collect\"><strong>Tip #6: Collect signatures on site and provide backup documentation<\/strong><\/h2>\n\n\n\n<p>A payment can also be delayed when a customer questions an invoice, so it\u2019s best to take some additional actions that can prevent disputes.<\/p>\n\n\n\n<p>First, make sure you always collect the customer\u2019s signature when onsite&nbsp;, whenever a job is completed. On the document, include the date, service person\u2019s name, and hours they spent on the job. This way, you\u2019ll have proof the work was carried out and witnessed.<\/p>\n\n\n\n<p>Second, include some backup documentation on your invoices. This could be photos of the completed work or a completed preventative checklist.<\/p>\n\n\n\n<p>If the customer later questions their bill, you\u2019ll have both documents as reference. This helps you clarify the work carried out, which removes confusion and any excuses not to pay.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Learn how Sage Construction and Real Estate puts power into the hands of your people<\/h2>\n\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-us\/sage-construction\/customer-resources\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-19089\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Tell me more<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/06\/GettyImages-140872290-1440x810.jpg\" class=\"single-cta__image\" alt=\"construction workers\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/06\/GettyImages-140872290-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p>How quickly and reliably your customers pay you can be the difference between growing your construction business and falling behind competitors. You need cash available at all times, which means being proactive in improving cash collection.<\/p>\n\n\n\n<p>Follow the 6 tips above, and you\u2019ll start to see healthier cash flow and more financial freedom.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to invoice promptly, automate time collection, set credit limits and more when dealing with cash collection for your construction business.<\/p>\n","protected":false},"author":407,"featured_media":19093,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[404],"tags":[192],"business_type":[],"lilypad":[],"context":[],"industry":[50],"persona":[],"imagine_tag":[246],"coauthors":[608],"class_list":["post-19088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-construction","tag-construction","industry-construction-and-real-estate"],"sage_meta":{"region":"en-us","author_name":"Rob Arkes","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/06\/GettyImages-664661759.jpg","imagine_tags":{"246":"Construction"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/19088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/407"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=19088"}],"version-history":[{"count":1,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/19088\/revisions"}],"predecessor-version":[{"id":34648,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/19088\/revisions\/34648"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/19093"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=19088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=19088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=19088"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=19088"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=19088"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=19088"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=19088"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=19088"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=19088"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=19088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}