Float Analysis: How Long Your Money Is Actually Gone on Every Pay App

On a monthly pay app, your money is gone for about 36 to 46 days in the examples worked through below: 46 days from submission to sub funding on one job, and 36 days from cash out to cash back on another. That stretch is float, the time your company funds the project out of its own pocket. You find your own number by logging four dates on every pay app: submission, certification, owner payment, and sub funding.

What Float Is and Why It Matters

You submit a pay app on the 25th. You pay your subs on the 10th of the following month. In between, your company is carrying the project. Most GC owners know there is a lag between billing and payment. Few have mapped how long it runs on each job or where the days pile up.

Float is not a theoretical number. It is a real cash drag that compounds across every active project you carry. A $2 million commercial job with 45 days of float is a different business problem than that same job with 20 days of float. Knowing the difference changes how you bid, how you structure subcontracts, and whether you need a line of credit at all.

The Three Legs of the Float Calculation

Float on any pay app breaks down into three measurable intervals.

1. Submission to Approval

This is the time from when you submit your G702/G703 to when the architect or owner certifies it. On a well-run project with a responsive architect, this runs 7 to 10 days. On a slow one, it stretches to 21 days or longer. The G702 does not enforce a review deadline on its own. Your contract does, or it does not. If your contract is silent on review turnaround, you are at the mercy of whoever sits across the table.

2. Approval to Owner Payment

Most owner contracts set a payment window after certification, commonly 30 days. Some public contracts pay in 45 or even 60 days. Know your contract's payment window exactly, and track whether the owner hits it. A 30-day payment window that routinely runs 40 days is a 10-day cash drag you did not price.

3. Your Payment to Subs

This is the leg you control most directly. If your subcontracts contain a legitimate pay-when-paid clause, the clock on sub payment starts when you receive owner funds. If you pay subs on a fixed schedule regardless of owner payment, you are absorbing float risk that you passed downstream in the contract language. The clause types are covered in our guide to pay-when-paid vs. pay-if-paid clauses.

How to Calculate Your Actual Float

Pull the last six pay apps on any active job. For each one, record four dates: submission date, certification date, owner payment receipt date, and the date you funded sub payments from that draw. The gap between submission and sub funding is your total float for that cycle.

A simple example: you submit on September 25. The architect certifies on October 5 (10 days). The owner pays on November 4 (30 days after certification). You pay subs on November 10. Total float from submission to sub funding: 46 days.

On a $150,000 monthly draw, 46 days of float at a 7% annual line-of-credit rate costs roughly $1,350 in carrying cost for that single draw. Across 10 draws on a year-long project, that is $13,500 in financing cost that never appeared in your bid.

Worked Example: One Billing Cycle at Ridgeline Commercial Contractors

Ridgeline Commercial Contractors is a 45-person general contractor working a $4.2 million tenant improvement project for a private owner. The prime contract requires pay applications by the 25th of each month. The owner's contract allows 30 days to review and approve, and another 10 days to fund. Ridgeline's subcontract with its drywall sub, Atlas Interiors, is pay-when-paid, with payment due 10 days after Ridgeline receives funds from the owner. This is a typical mid-market setup. Nothing unusual, nothing aggressive.

Submission Day

On September 25, Ridgeline submits Pay Application No. 4 in the AIA G702/G703 format. It covers $380,000 of work completed through September 24. That total includes $210,000 of labor and materials Ridgeline has already paid out of pocket, and $140,000 for drywall rough-in that Atlas completed and billed to Ridgeline on September 18.

Ridgeline funded the Atlas invoice on September 22 to keep the sub on schedule. That was the right call operationally. It was also the moment Ridgeline's cash left the building.

Approval and Funding

The architect reviews the G702 cover sheet and the G703 continuation sheet line by line. On this project the architect's office is slow. The certificate is issued on October 18, 23 days after submission. The owner then has 10 calendar days to fund, and the wire hits Ridgeline's account on October 28. From submission to receipt: 33 days.

But Ridgeline paid Atlas three days before the pay app was even submitted. The real float from when cash left Ridgeline's account to when it came back: 36 days.

The Sub's Side of the Chain

The subcontract reads: "Payment to subcontractor shall be made within 10 days of receipt of payment from owner." With owner funds received October 28, that date is November 7. The chain for the cycle looks like this:

• September 22: Ridgeline pays Atlas $140,000
• September 25: Ridgeline submits Pay App No. 4 for $380,000
• October 18: Architect issues the certificate of payment
• October 28: Owner funds Ridgeline, 33 days after submission and 36 days after cash out
• November 7: The date Atlas would have been paid under the pay-when-paid clause alone

Look at that last date from the sub's seat. Had Ridgeline held Atlas to the clause instead of paying early, Atlas would have waited until November 7, 50 days after its September 18 invoice. A drywall sub mobilizes, buys board and metal framing, pays its own crew for two weeks, and waits to be made whole. Carrying a $140,000 receivable for 50 days at even a modest 8% annual line-of-credit rate costs the sub roughly $1,500 in financing. Small on its own. Multiplied across four active jobs, it becomes a real margin hit.

Where the Days Piled Up

In this cycle the float sits in three places.

• Pre-submission float: Ridgeline paid Atlas three days before submitting the pay app. The subcontract did not require it. It was a relationship decision. Legitimate, but it added three days of exposure that Ridgeline could have avoided by aligning sub payment with the end of the billing cycle instead of paying the moment an invoice arrives.
• Architect review float: The 23-day review is within the contract allowance but not the norm. When the architect takes 28 or 30 days, the owner's 10-day funding window starts later, and receipt slides to 38 to 40 days after submission. Tracking review time across billing cycles tells you whether slow approvals are a pattern or a one-off. If it is a pattern, raise it with the project architect at the next OAC meeting, backed by dates.
• Owner funding float: This owner funded in 10 days, exactly at the contract limit. Some owners fund in 5. Others push to 14 or 15 and assume GCs will not push back. Knowing your average funding time gives you data to cite when an owner is chronically late. You are not guessing. You are citing a 6-cycle average.

What It Costs in Working Capital

Ridgeline has four active projects with similar billing structures. If each carries an average outstanding receivable of $350,000 during the approval window, and the average float is 35 days, Ridgeline is financing approximately $1.4 million in receivables at any given time. At a 7% annual line-of-credit rate, that is about $8,200 per month in carrying cost, or roughly $98,000 over a year.

That is not a rounding error. It is real money that shows up as thin margins at year-end without a clear cause.

Where Float Gets Worse

Late pay app submission is the most common self-inflicted float problem. A pay app submitted five days late adds five days of unnecessary float to every downstream interval. If your contract bills monthly and you miss the cutoff, you wait another 30 days to even start the clock.

Disputed line items on the G703 extend the certification interval. An architect who flags a $4,000 line item on a $180,000 pay app can hold certification on the entire document. Itemize your schedule of values cleanly on the front end so there are no ambiguous cost descriptions to question later.

How to Shrink Your Float

Float cannot be eliminated, but it can be managed. Here is what Ridgeline's controller put in place after running the analysis.

• Hard billing deadline: Sub invoices must reach Ridgeline by the 20th. No invoice by the 20th means it rolls to next month's pay app, period. The billing team gets five days to compile, review, and submit the G702/G703 package on the 25th without scrambling.
• Aligned sub payment timing: Instead of paying sub invoices on receipt, Ridgeline batches sub payments to go out within five days of receiving owner funds. The pay-when-paid clause already supports this. Ridgeline now enforces it consistently instead of paying early as a default.
• Cycle-time tracking by project: For each billing cycle, the controller logs submission date, certificate date, and funding date. After three cycles per project, patterns are visible. If one owner consistently funds on day 14 instead of day 10, that four-day gap goes into the cash flow forecast.
• Early notice on large pending costs: When a major sub invoice is expected mid-month, the PM flags it in the job-cost system before it arrives. It gets captured in the current pay app instead of slipping to the next one, which would add a full 30-plus days of float on that cost.

Track float by project, not just by company. A job with a fast-paying owner and a well-drafted contract is a cash-positive project. A job with a slow architect, a 45-day owner payment window, and fixed sub payment dates is a cash-negative project even if it is profitable on paper.

Use your float data when you negotiate the next contract. A twice-monthly billing schedule cuts your average float almost in half compared to monthly billing. Submission deadlines written into the contract protect you from slow certification. These are not big asks, and most sophisticated owners will accept them.

Float analysis also tells you exactly when you need your line of credit and for how much. Instead of guessing, you draw precisely and repay quickly, which keeps your cost of borrowing low.

What a Few Days Are Worth

For a GC running $8 million to $15 million in annual revenue, a 5-day reduction in average pay app float across all active projects can free up $50,000 to $100,000 in working capital. That is capacity to take on an additional project, reduce line-of-credit draws, or simply sleep better at month-end.

The float problem is invisible until someone maps it. Most GCs know when they submit and when they get paid. Few track the full chain from cost incurred to sub paid and measure it consistently. When you have that data, you stop reacting to cash crunches and start anticipating them.

For the retainage side of the same cash picture, see retainage tracking and release and our guide to planning retainage release milestones to smooth your cash flow.

Cash flow visibility starts with clean billing and cost data. EZBilling gives you both in one system built for construction.