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

The Gap Nobody Talks About

You submit a pay app on the 25th. You pay your subs on the 10th of the following month. In between, there is a stretch of time where your company is funding the project out of its own pocket. That stretch is called float, and most GC owners have no idea how long it actually runs on each job.

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.

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 AIA 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 actually 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 are paying subs on a fixed schedule regardless of owner payment, you are absorbing float risk that you passed downstream in the contract language.

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.

Where Float Gets Worse

Late pay app submission is the most common self-inflicted float problem. A pay app submitted five days late is five days of unnecessary float added 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.

What You Do With This Information

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.

Start Tracking It Now

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