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Winning a new project is always exciting—until you (as the subcontractor) realize how much capital you’re expected to invest before the shovel breaks the ground. It can be months before you see a dime from the general contractor (GC). This is partly due to the industry’s pay-when-paid cash flow model, where subcontractors are—unfortunately and unavoidably—relegated toward the back of the line. However, outdated, yet common, progress billing processes also contribute to these prolonged payment cycles. The primary culprit? Spreadsheets.

In this article, we’ll explore how spreadsheets fall short of subcontractor progress billing workflows, alongside the time and productivity costs associated with spreadsheet-based billing. But first, let's take a closer look at how the current subcontractor billing process typically unfolds and where problems arise.

The Traditional Approach to Subcontractor Progress Billing

For most subcontractors, the progress or AIA billing workflow is a frustrating and time-consuming process that involves cobbling together information across spreadsheets, emails, PDFs, phone calls, Post-It Notes, etc. Here’s how it typically goes on any given project:

1. Subcontractors receive custom pay application forms (usually as PDFs) from the GC or client. Accounting teams maintain these forms, typically storing them on a local drive.
2. Accounting teams add the projects and clients� requirements (like due dates and form names) to their spreadsheet trackers and billing worksheets (spreadsheets with SOV tables). Depending on project requirements and complexity, this can take up to a full day to set up.
3. Accounting generates the conditional lien waiver and requests unconditional lien waivers from vendors, which often results in chasing them down.
4. Accounting hunts for approved change orders, enters them into spreadsheet trackers, and denotes values in the pay app package.
5. Accounting teams share billing worksheets with every project manager (PM) across each project, reminding them to update the data with current progress totals.
6. PMs add their totals to the spreadsheets (sometimes after numerous reminders).
7. Accounting then double-checks the client’s requirements and uses Bluebeam, Acrobat, or pen-and-paper to fill out the payment application form with the progress totals.
8. Accounting locates any backup proof required for the pay app.
9. Accounting verifies compliance requirements for the project and produces any required documentation.
10. Accounting confirms the pay app form is correct, and they’ve collected everything required for payment.
11. Accounting compresses all of these documents into a single PDF file.
12. Accounting submits the payment application and lien releases via email to the client. Occasionally, the client requires that they are submitted through a payment portal, like GCPay, Textura, and Procore Pay, which accounting software doesn’t integrate with.  
13. Accounting updates its accounting or ERP software with the billed amounts and hopes there's no cause for the client to delay payment.
14. If the GC doesn’t fulfill the payment application (as in, doesn’t pay the subcontractor), they typically don’t notify the subcontractor. So, it’s up to the subcontractor accounting team to reach out and see why they weren’t paid, which typically culminates in a mad scramble to ensure the necessary corrections get made to avoid delaying the payment cycle further. 

As you can see, this process is fraught with tedious, repetitive tasks that are further complicated by using spreadsheets and siloed file-saving systems. As is, this process can take days or even weeks (depending on the number of projects you’re billing each month), diverting time and resources away from higher-value work, like collections.

The Downside of Spreadsheets in Construction Billing

Now, I’m not saying spreadsheets are completely useless. In the right context, they can be helpful. However, spreadsheets lack the advanced features and integration capabilities needed to manage the intricacies of a subcontractor’s accounts receivables. Continuing to use them can (and often does) introduce additional obstacles that can undermine your bottom line—which isn’t great considering that, behind employer safety, collecting payments is the single most important thing to running a subcontractor business. 

Here are the reasons why spreadsheets are inadequate for construction billing.

They’re manual.

Spreadsheet-based billing processes require extensive manual data entry, repetitive tasks, and lots of human touches. This makes them incredibly time-consuming and inefficient. For example, A/R managers may spend hours—days, even—manually inputting line items from various schedules of values (SOVs) into spreadsheets, only to repeat this process month after month.

They’re error-prone.

The manual nature of spreadsheets leaves them vulnerable to data entry mistakes, formula errors, and other inadvertent inaccuracies that can have cascading effects on the entire billing process. All it takes is entering one wrong digit or using the incorrect version of a file to result in a pay application that is significantly off, delaying payments further and straining relationships with clients. 

Their formulas easily break.

Spreadsheet formulas are notoriously finicky. Even the smallest change—like adding a new row—can cause the entire document to malfunction, leading to incorrect calculations and inaccurate pay applications. This can be particularly problematic for subcontractors who need to account for complex change orders, retainage, and other billing variables that require more than basic formula logic.

They create knowledge silos.

Managing payments through spreadsheets is a process often owned by a single person at the company. This creates knowledge silos, which in turn set the stage for natural points of failure. What happens if that person is on vacation during billing week? This problem is rooted in two big issues: 

• Spreadsheets lack transparency. With spreadsheets, visibility into the billing workflow is limited, making it tough for anyone beyond the person managing them to stay in the loop. Without a centralized view of billing progress, controllers, PMs, and other team members may struggle to access the information they need, leading to miscommunication and delays.
• Spreadsheets don’t update in real time. The static nature of spreadsheets means that information is not automatically updated, requiring a ton of manual upkeep to ensure everything remains current. It also requires that the person responsible for updates constantly circulate new versions to project stakeholders, which is a perfect recipe for things slipping through the cracks and a great segue to the next point.

They aren’t cloud-based, which creates version chaos.

Without cloud-based collaboration capabilities, spreadsheets are prone to version control issues, with multiple project stakeholders working on different iterations of the same document. As you can imagine, this increases the risk of errors and inconsistencies (e.g., missing updated progress and change orders). It all results in major headaches for subcontractors who are working tirelessly to coordinate billing information across multiple projects at once.

They don’t integrate with your accounting system or GC payment portals.

Because spreadsheets operate in isolation, they cannot integrate with other systems your team uses, like your accounting software and GC portals (think Textura, GC Pay, and Procore). This makes it particularly difficult to streamline and visualize your A/R processes. What’s more, it forces you to manually re-enter billing information from accounting software to spreadsheets and back—and then send it through the GC’s preferred payment gateway—increasing the likelihood of errors at each inflection point.

They don’t offer reporting or analytics.

Extracting meaningful insights and generating comprehensive reports from spreadsheet data can be a time-consuming task, further limiting visibility into cash flow, average days to payment, and other key performance indicators. This hinders the team’s ability to identify areas of improvement and manage cash flow from a proactive state, both of which can impede company performance over time.

The Cost of Managing Billing on Spreadsheets

I’ve laid out the case for why spreadsheets aren’t great for construction billing. But, what is the sum total cost of these shortcomings? Let me paint a quick picture: 

Time and productivity are lost.

The manual nature of spreadsheet-based billing results in significant time and labor inefficiencies. From tedious data entry to constantly checking for accuracy to resolving discrepancies, these repetitive, non-value-adding tasks contribute to substantial waste. In fact, according to data from , back-office inefficiencies cost anywhere from 20% to 30% of a company’s revenue each year. Basically, the longer it takes to get all that billing work done, the more it’ll cost you.

Cash flow is restricted.

Every day you work without getting paid makes the money you earn less valuable—and the longer it takes for that project to become cash-positive. Think of it this way: if the owner or GC waits to pay you 90-plus days, you’re not getting interest on that late payment—but you are footing the bill for the inflation and borrowing costs. 

So, with every spreadsheet-fueled error, oversight, or missed deadline, those vital subcontractor payments are delayed even more, compounding the damage. To put a number on it, found that 36% of construction business owners say delays in getting paid quickly have cost them money. And a lot of that stems from the inefficiencies baked into spreadsheet-based billing workflows.

Your competitive edge dulls.

As other industries continue to digitize their workflows, construction remains one of the most technologically laggard sectors. This puts subcontractors leveraging outdated, spreadsheet-based approaches at a major competitive disadvantage. Recognizing this, 32% of owners and contractors have reported the need for new technologies that can help drive operational efficiencies and cost controls in response to current economic conditions. ()

The Benefits of Construction Billing Software

How can you solve these problems and eliminate the headaches of spreadsheet-based billing? The answer is to move to a system—like Siteline—that can automate and streamline these manual billing workflows for you. So, instead of the 14-step process outlined above, you can bill in four easy steps:

1. Accounting creates invoices.
2. Siteline sends reminders to PMs to edit invoices and add backup materials.
3. Accounting requests lien waivers and updates compliance documents. Siteline automates reminders for these items.
4. Siteline generates complete, accurate pay applications that accounting then submits with a click of a button.

It’s not just about creating fewer steps in the workflow, though. With Siteline, you can:

• Quickly generate the pay app package, including any custom forms, and then submit it to the client through the required portal.
• Get a high-level view of the status of pay apps across all projects and clients, or drill in for granular, project-specific details.
• Pull visual reports to share info like A/R aging, projected payment dates, and which GCs are the slowest and fastest payers.
• Easily manage all the lien waivers for yourself and your lower-tier subs and suppliers.

Siteline helps you eliminate the roadblocks that come with outdated billing processes so you can get paid faster and focus on more meaningful work (like collecting what you’re owed). No more wasted time, no more math errors, no more cash flow hiccups—just streamlined, efficient billing that keeps your business humming.

To learn more about ditching spreadsheets and automating your billing workflows, check out our latest webinar. Or even better, book a demo to get a custom tour of Siteline.