When 60-day terms make you the builder's bank

The cash trap in long terms

Sixty-day terms can look normal on paper, but for a subcontractor they can quietly turn into an interest-free loan to the builder. You still pay labour, fuel, materials and GST now, while the invoice sits on someone else’s schedule. Business.gov.au notes that clear payment terms affect cash flow, because you are waiting longer for money already earned. ([business.gov.au](https://business.gov.au/finance/payments-and-invoicing/payment-terms?utm_source=openai))

The practical consequence is not just frustration. Longer terms can squeeze wages, supplier payments and tax, even on a job that looks profitable. If your money is trapped for two months, every new project has to carry the old one. That is why the question is not whether 60 days is common, but whether your business can afford it. ([business.gov.au](https://business.gov.au/finance/payments-and-invoicing/payment-terms?utm_source=openai))

Work out the cash tied up

Start with the cash tied up in one invoice, then multiply it by your monthly volume. If you issue $80,000 a month and wait 60 days, you may have two months of work outstanding at once. That gap is often bigger than the margin on the job, which is why payment timing deserves the same attention as price. ([business.gov.au](https://business.gov.au/finance/payments-and-invoicing/payment-terms?utm_source=openai))

A simple check helps. List the gross amount outstanding, the labour and material cash already paid, and the date you expect settlement. Then compare that number with the cash you need to keep working. Business.gov.au recommends tracking cash flow closely and adjusting payment terms when costs or market conditions change. This is the number that tells you whether you are underwriting the client. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

Source: Official guidance

Ask for shorter terms in writing

Once you can show the gap in dollars, ask for shorter terms instead of simply asking for faster payment. A direct proposal is easier to answer: 30 days, payment on stage completion, or a deposit before mobilisation. Business.gov.au says contracts should set payment timing clearly, and construction work commonly uses stage or progress payments. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

If the builder pushes back, keep the conversation practical. Explain that you are not asking for special treatment, only for a schedule that matches when you actually spend money. Ask for written confirmation and make sure the invoice, contract and email trail all say the same thing. Clear terms help reduce disputes and protect cash flow. ([business.gov.au](https://business.gov.au/finance/payments-and-invoicing/payment-terms?utm_source=openai))

Use progress claims and price the delay

Use progress claims to stop the debt from getting bigger than the job. Stage billing breaks the gap into smaller pieces, so you are not carrying the whole contract until the end. Business.gov.au notes that the construction industry commonly uses progress payments tied to stages or milestones, which is exactly where many cash flow problems can be trimmed. ([business.gov.au](https://business.gov.au/planning/industry-information/construction-industry?utm_source=openai))

Then price for the reality, not the hope. If you are giving the builder two months of free finance, that cost belongs in your margin, overheads or both. Business.gov.au says prices should cover costs and be reviewed when costs or market conditions change. If not, every delayed invoice eats the profit you thought the job had earned. ([business.gov.au](https://business.gov.au/products-and-services/choose-a-pricing-strategy?utm_source=openai))

Take the next step before the gap grows

This week, total the invoices held on 60-day terms, then test what shorter terms would do to your working capital and margin. Take that figure to the builder before the next job starts, not after the account is already stretched. If the gap is already hurting wages, supplier trust or tax timing, CRP can help you map the turnaround options with the right independent professionals. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

CRP is not a law firm, and this article is general information only. The aim is to help you see the cash cost of long terms, tighten the contract, and build a price that can carry the delay. If you want help pressure-testing the numbers and the next move, call CRP today about turnaround support. ([business.gov.au](https://business.gov.au/people/contractors/negotiate-a-contract?utm_source=openai))