Overbilled, and still behind in cash
The WIP schedule says you billed 6, 8 and 10 percent more than the work you've done. Then 45 days pass before the money is paid. This page does the math on what that wait costs you.
Published October 17, 2026. Updated October 17, 2026.
With 45 day payment terms, an overbilling of 6, 8 or 10 percent of contract value leaves any job shorter than 15 months behind the work done in cash.
On a $1,000,000 job that lasts 6 months, 45 days of unpaid billing is $250,000, or 25.00 percent of the contract. An overbilling of 10 percent is $100,000. Cash is $150,000 behind the work done, even though the WIP schedule reads overbilled.
- Overbilling. Overbilling is the amount billed above the work done: billings in excess of earned revenue. This page states it as a percent of contract value.
- Receivable. The receivable is the billing you have sent and not yet collected. With an even billing pace it equals the last payment term of billing.
- Model. The model bills and earns evenly across the job, uses 30 day months, and counts the receivable as the last payment term of billing. Cash against the work done is the overbilling minus the receivable.
Cash against the work done at 45 day terms
A $1,000,000 contract. Each cell is the dollars ahead of or behind the work done once the first payment cycle has passed, for an overbilling of 6, 8 and 10 percent of contract value.
| Job length | Unpaid billing | 6% overbilled | 8% overbilled | 10% overbilled |
|---|---|---|---|---|
| 3 months | $500,000 (50.00%) | $440,000 behind | $420,000 behind | $400,000 behind |
| 6 months | $250,000 (25.00%) | $190,000 behind | $170,000 behind | $150,000 behind |
| 9 months | $166,700 (16.67%) | $106,700 behind | $86,700 behind | $66,700 behind |
| 12 months | $125,000 (12.50%) | $65,000 behind | $45,000 behind | $25,000 behind |
| 18 months | $83,300 (8.33%) | $23,300 behind | $3,300 behind | $16,700 ahead |
| 24 months | $62,500 (6.25%) | $2,500 behind | $17,500 ahead | $37,500 ahead |
How long a job has to be before the overbilling covers the wait
15 months. Overbilling covers the receivable only when the overbilling rate times the job length reaches the payment term in months, so 10 percent needs a job of 15 months or longer, and 6 percent needs 25 months, 8 percent needs 18.8 months and 10 percent needs 15 months at 45 day terms.
| Payment terms | 6% overbilled | 8% overbilled | 10% overbilled |
|---|---|---|---|
| 30 days | 16.7 months | 12.5 months | 10 months |
| 45 days | 25 months | 18.8 months | 15 months |
| 60 days | 33.3 months | 25 months | 20 months |
| 75 days | 41.7 months | 31.3 months | 25 months |
| 90 days | 50 months | 37.5 months | 30 months |
Research from another source
These figures come from another company's survey, not from Run On CFOS. Each one cites the report and the page.
Billd's 2026 National Subcontractor Market Report found subcontractors reported waiting an average of 51 days for payment, against 35 days reported by general contractors.
Source: Billd, 2026 National Subcontractor Market Report, pages 4 and 5 (survey of 623 respondents, published May 13, 2026).
The report doesn't state when the 51 days start. The 2024 and 2025 reports measured the wait from the pay application.
Billd's 2026 National Subcontractor Market Report found 79 percent of subcontractors use supplier terms to buy materials, and 77 percent have supplier terms of 45 days or less.
Source: Billd, 2026 National Subcontractor Market Report, page 9 (survey of 623 respondents, published May 13, 2026).
The report's text says 77 percent and its chart for the same question reads 78 percent.
Billd's National Subcontractor Market Reports put the average subcontractor payment wait at 57 days in 2024, 56 days in 2025 and 51 days in 2026.
Source: Billd, 2024 National Subcontractor Market Report, page 4 (survey of 696 respondents, published April 22, 2024); Billd, 2025 National Subcontractor Market Report, page 3 (survey of over 800 construction professionals, published April 15, 2025); Billd, 2026 National Subcontractor Market Report, page 4 (survey of 623 respondents, published May 13, 2026).
The 2024 and 2025 reports measured the wait from the pay application. The 2026 report doesn't state a starting point, so read the three figures as a direction and not as a like for like trend.
What this does and doesn't say
To see the same wait in your own numbers, the 13 week cash flow forecast puts each pay app on the day the money is paid. Related reading: pay when paid and the cash it costs you and underbilling that hides a loss.
Download the math
Every job length, every payment term and every overbilling rate in the model, as a spreadsheet and as JSON. Both include the date and the credit on every row, and both change when this page changes.
What readers ask
What does overbilled mean in construction?
Overbilling is the amount billed above the work done: billings in excess of earned revenue. This page states it as a percent of contract value.
Why am I short on cash when my WIP schedule says I'm overbilled?
On a $1,000,000 job that lasts 6 months, 45 days of unpaid billing is $250,000, or 25.00 percent of the contract. An overbilling of 10 percent is $100,000. Cash is $150,000 behind the work done, even though the WIP schedule reads overbilled.
How long does a job have to be before a 10 percent overbilling covers 45 days of waiting?
15 months. Overbilling covers the receivable only when the overbilling rate times the job length reaches the payment term in months, so 10 percent needs a job of 15 months or longer, and 6 percent needs 25 months, 8 percent needs 18.8 months and 10 percent needs 15 months at 45 day terms.
Does retainage change this?
Yes. Retainage that's held back adds to what you're owed and haven't collected, so the cash position is worse than the table shows.
If you are quoting this page
Run On CFOS. Overbilling against payment terms. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/overbilling-and-45-day-terms. CC BY 4.0.
Figures on this page were last revised 2026-10-17. Published under CC BY 4.0, which permits reuse of any figure here, including commercially, as long as the credit above travels with it. The same figures in machine-readable form: /overbilling-and-45-day-terms.json.
Wrote CONTROL, the 8 step system behind these figures. More about the author.