Cash-Cycle Days

Cash-Cycle Days is the operational measure of how long a general contractor funds the gap between paying its subcontractors and receiving the corresponding owner draw. On most projects the GC pays subs on a 30-day cycle against approved pay applications while the owner draw lags by an additional 15 to 30 days, forcing the GC to carry the difference on its working capital line.

Cash-Cycle Days is often a GC's single largest operating cost and is invisible to accounting systems that treat payables and receivables as separate ledgers. The Construction Clearinghouse makes this number measurable per project, per trade, and per pay-app cycle, and compresses it by collapsing reconciliation between pay apps, waivers, and draws.

A high Cash-Cycle Days figure correlates with draw-binder assembly delays, missing lower-tier waivers, insurance lapses that hold pay apps, and manual reconciliation between PM systems and accounting. Each of these is a compliance-gate event on the Clearinghouse ledger, which is why firms routing capital through the money layer typically see cycle-day reductions in the first 90 days.

Measure Cash-Cycle Days as the median difference in days between the approved pay-app disbursement date and the corresponding owner draw funding date on the same project, over a rolling 90-day window. A target of under 35 days is achievable for GCs running on the Clearinghouse with an active operating team.

Industry medians for Cash-Cycle Days on commercial construction sit in the 45 to 60 day range. Firms that compress this number by 10 to 20 days typically free up meaningful working-capital headroom that can fund additional active projects without increasing the line of credit.