The relationship between suppliers and subcontractors is critical for roofing projects and business to succeed. Unfortunately, late payments are straining that relationship, causing costs to go up around the nation.

According to the 2023 National Subcontractor Materials Report, subcontractors in the United States paid $97 billion more for materials and labor than they did in 2022. Part of this is a delayed payment for services — according to the report, the average wait time for subcontractors to be paid was 74 days, making them pay for labor and materials out of pocket. As a result, despite a majority of those companies seeing revenue growth, 57% reported a decline in profitability, hurting the bottom line for not just them, but their suppliers.

In this video, RSP Publisher Jill Bloom and “Credit Overlord” Thea Dudley, CEO of Pocket Protectors, discuss the report and spell out what distributors can do to help their customers who are struggling to collect payments.

“As a supplier, helping your customers kind of navigate that, suppliers usually have really robust credit departments with very talented people in them,” Dudley said.

To shorten that 74-day payment delay, suppliers can lend a hand to subcontractors who are facing a tough time collecting payments, which in turn can help the suppliers themselves receive the payments they’re owed.

“[As] a supplier, I can call the owner or the GC and go, ‘Listen, we're not getting paid because our customer says the money's not been released. And what's the holdup?’” Dudley says.

Aside from these nudges, Dudley said distributors have other tools at their disposal to put on the pressure, such as enacting liens, to speed up the process.

For more information and tips, watch the full video here, or download the audio version on our podcast page and listen on the go.