They are holding ten percent and I do not know what that adds up to.
That is your profit, sitting in someone else’s account, on a release schedule you have not been told. Across four contracts it is usually a bigger number than the owner guesses.
For subcontractors working under GCs
The paperwork is not the general contractor being difficult.
Retainage, pay applications, change orders and prequalification all arrive at once when you start taking work under real general contractors. It reads as administration. It is actually where your margin is going, and none of it is visible in books built to produce a tax return.
Four sentences
If you have said any of these, you already know where the problem is
Each one sounds like a paperwork complaint. Each one is a number. That gap is the whole of it, and it is why this stops being annoying and starts being expensive.
My pay app got rejected and I lost thirty days.
A G702 that does not tie to the schedule of values comes back, and the next billing window is a month away. You financed that month out of your own working capital.
I did the extra work, they never sent the change order, and now nobody wants to talk about it.
Work performed against an unapproved change order is cost with no revenue behind it. If it is not logged as performed and unapproved the day it happens, it quietly becomes a gift.
They want three years of financials and a WIP schedule. I do not have a WIP schedule.
That is a prequal packet coming back short, and it is the point where paperwork stops being annoying and starts deciding which jobs you are allowed to bid.
When it starts to matter
It is not about how big you are
Nothing here is triggered by crew size or revenue. It is triggered by the kind of work you have started taking, and it usually arrives all at once rather than gradually.
- Your first contract with retainage on it
- Your first AIA pay application
- A prequal packet that came back short
- Your first public job, and the certified payroll that arrives with it
- The first time a general contractor asks you to bond
Any one of these changes what your books have to do. If none of them has happened yet, you probably do not need us, and that is a legitimate answer.
What we run
The reporting a general contractor is actually asking for
The same discipline the bonded contractors on our book run, at the scope you are at now. The catalog does not change as you grow. The amount of it you need does.
G702 and G703 that tie to the schedule of values
Pay applications built from the same numbers your books hold, in the format the general contractor expects, so they stop coming back. The schedule of values is maintained rather than rebuilt each cycle.
Retainage tracked by contract
Aged by contract, receivable and payable, and reported separately from current accounts receivable. You know what is being held, on which job, and when it is due to land.
Change orders logged as performed and unapproved
The moment work goes ahead without paperwork behind it, it exists as a tracked position rather than a conversation someone has to remember. That is the difference between negotiating from a record and negotiating from memory.
Insurance certificate and lien waiver tracking
The documents that stall a pay application are collected and kept current, so payment is held up by the work rather than by a lapsed certificate nobody was watching.
Certified payroll when you pick up public work
WH-347 and the state equivalents, on the cadence each contract requires, with prevailing wage determinations tracked by trade and locality. This arrives the first time you take a public job, usually with no warning.
Books that survive a prequal packet
Accrual books alongside the cash basis your return needs, a chart of accounts structured for job reporting rather than for a tax form, and a work-in-progress schedule that exists before somebody asks for it.
What it costs is set by scope, not by your revenue. How many contracts are open, how many pay applications you issue, how many jobs you are cost-coding, how many people you run through payroll. We quote it after we have looked at your books, and it is reviewed quarterly in both directions, so a slower quarter costs you less.
See how the engagement is builtWhere this goes
Then a GC asks you to bond a job you want
That is usually how it arrives. Not as an ambition, as a question about work you had already decided you wanted, with a deadline attached. A surety will ask for three years of financials and a current work-in-progress schedule, which is most of what a prequal packet asks for, so a contractor whose reporting already answers one is most of the way to answering the other.
After that the constraint changes hands. You stop bidding against your own paperwork and start bidding against a limit, and the work becomes the schedule an underwriter reads, bonding capacity, and a cash forecast built on your draw and retainage schedules. It is the same engagement carried further. Nothing gets rebuilt when you get there, which is the argument for building it properly the first time.
See the bonded engagementQuestions
What subcontractors ask before they move
What is a schedule of values, and why does my pay application keep coming back?
The schedule of values breaks the contract sum into line items, and the G703 continuation sheet reports progress against each one. A pay application is rejected when the numbers on it cannot be tied back to that schedule, when stored materials are claimed incorrectly, or when the retainage calculation does not match the contract. Almost all of it is a bookkeeping structure problem rather than a dispute about the work, which is why it is fixable.
What is a WIP schedule and why does a general contractor want one?
A work-in-progress schedule lists every open contract with its contract value, costs incurred, estimated cost to complete, and amounts billed, and from that derives whether each job is over- or under-billed. A general contractor prequalifying you reads it to judge whether you can carry the work without running out of cash mid-job. If you have never produced one, it is normally the missing document in a prequal packet.
I am not bonded. Is this still for me?
Yes. Plenty of contractors at this stage are not bonded, or were bonded once and did not enjoy it. Retainage, progress billing against a schedule of values, change orders and prequalification all arrive before a bond does, and they are the things costing you money now. If a bond request does come, the reporting that answers a prequal packet is most of what a surety asks for anyway.
My spouse does the books. Does she lose the job?
That is a decision rather than a requirement, and it is worth having deliberately. In most cases the books were built to produce a tax return, which is a different job from producing a pay application and a WIP schedule. We often take the contract reporting and leave day-to-day entry where it is. What we do not do is quietly expand until nobody knows who owns what.
How is this different from what my accountant does?
Your accountant files the return and reports what already happened. This is contract reporting: a pay application that ties to the schedule of values, retainage tracked by contract, change orders logged before they are approved, and a work-in-progress schedule that exists when someone asks for it. Most contractors at this stage need both, and we will say so rather than push you to consolidate.
How big do I need to be?
Size is not the qualifier. What matters is whether your work arrives as contracts carrying retainage and progress billing, and whether anything is attached to the reporting: a prequal you need to pass, subs you pay, enough concurrent jobs that costing changes a decision, or a bond request on the horizon. If none of that is live yet, standalone bookkeeping is attached to nothing and we will tell you that rather than sell you the smallest thing we have.
Bring the last pay application that came back
That and your current contracts are enough for a first conversation. We will tell you what the retainage across them actually adds up to, what is stalling the billing, and whether this is worth paying anyone to fix yet. If it is not, we will say so.
Talk it through