Commercial Construction
Commercial Construction Progress Billing Case Study
Accelerating retainage collection and progress invoice approval cycles across multi-year subcontractor contracts.
1. Commercial Context
Operating in the Commercial Construction sector requires balancing competitive credit extension terms against ongoing treasury cash flow requirements.
2. The Numbers & Worked Arithmetic
Gross Credit Revenue: $12,500,000
Average Accounts Receivable: $1,450,000
Computed Collection Period (DSO) = ($1,450,000 ÷ $12,500,000) × 365 = 42.34 Days
Average Accounts Receivable: $1,450,000
Computed Collection Period (DSO) = ($1,450,000 ÷ $12,500,000) × 365 = 42.34 Days
3. Strategic Takeaways
By enforcing 14-day automated dunning reminders and offering 1.5% early payment settlement discounts, receivables collection speed improved by 22%, unlocking over $800,000 in liquid working capital.