Progress claim timing: the cash levers that work on any building contract
Updated: Sep 20
Most mid-project cash dips are not a margin problem. They are a timing problem - the gap between when you spend and when you get paid. That distinction matters, because timing is far cheaper to fix than margin, and several of the fixes cost nothing but discipline. Here is what actually moves cash, starting with the levers that work whatever your contract says.
Why does cash get tight in the middle of a job?
Because your costs peak before your receipts do.
The front end of a build is cheap for you - deposit in, minimal spend. The back end is cheap too - most costs are done, final claim and retention release are ahead of you. The middle is where trades, materials and prelims all run at once, and where what you can claim is usually least generous relative to what you are spending.
On a $2M job with a 10-month program, you might spend around $180,000 in a peak month, claim it at month end, and see the cash roughly four weeks after that. At any point in the middle of that job you are carrying six to seven weeks of costs - $250,000 to $300,000 of your own money, in one job. Run three jobs through that phase at once and it is most of your facility.
That arithmetic holds whether you are on monthly commercial claims or domestic stage payments. What changes is which levers you can pull.
What Victorian builders should check first
Victoria's security of payment regime was substantially amended by the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025, with changes commencing 15 April 2026 and a further round on 24 June 2026. Three points matter for cash.
Payment terms are now capped. Legal commentary on the amendments describes a maximum of 20 business days from service of a payment claim, even where the contract says otherwise. If you have been accepting 30, 45 or 60-day terms because that is what the contract said, that clause may no longer do what it used to.
The changes reach contracts you have already signed. The amendments have been described as applying retrospectively to contracts entered into before commencement. This is the part most builders have missed: the cash improvement is available on your current book, not just on the next job you sign.
December and January now work differently. The period from 22 December to 10 January is no longer counted as business days, which changes the timing on any claim served around Christmas. Plan the December claim deliberately rather than discovering the shift in February.
If you have not had someone read your live contracts against the amended Act, that is the highest-value hour available to you right now - and it is a lawyer's hour, not ours. What we can tell you is what it is worth in cash once it is done.
The four levers that work on any contract
1. Claim on the day, every time. The most common leak we see is not aggressive principals - it is claims going in three to five days late because the paperwork was not ready. On a monthly cycle, five days late is five days of interest on the entire claim, every month, for the life of the job. Put the claim date in the program and treat it like a pour: named owner, fixed date, no exceptions.
2. Get variations into the current claim. A variation approved on the 10th and claimed in next month's claim is thirty extra days of you funding someone else's decision. Variations sitting unpriced in an inbox are worse - unclaimed variations are the most common leak we find, often around 10% of contract value. Review the variations register before every claim, not after.
3. Match subcontractor terms to your own receipts. If you are paid twenty business days after a claim but pay subbies on fourteen days, you are financing the job by roughly a month, every month. Aligning subcontract payment terms to sit just behind your expected receipts is ordinary practice - but it belongs in the subcontract, agreed up front, not negotiated after the invoice lands. Note that security of payment legislation constrains how far down the chain you can push terms, so this is an alignment exercise, not a squeeze.
4. Chase retention like it is money, because it is. Retention is commonly 5% of the contract value, with roughly half released at practical completion and the balance at the end of the defects liability period - most often twelve months later. Neither release is automatic. Both need a certificate, and someone chasing it. Almost every builder we start with has retention outstanding on jobs finished more than a year ago: money already earned, already taxed, sitting in someone else's account.
Build a retention register with two dates and one owner per job. It is the single highest cash-per-hour task on this list, and nobody does it because it is nobody's job.
The levers you decide before you sign
These two are real, but they are pre-signature decisions and they are not available on every contract.
Claim frequency. Where the contract sets the claim cycle, that cycle is what you get - under the security of payment regimes you generally cannot serve more than one payment claim per reference date, and the default reference date is monthly. If more frequent claiming would materially help your working capital, it has to be negotiated into the contract at tender stage. It is worth asking for. It is not something you can start doing mid-job.
How the claim schedule is weighted. On commercial work, if site establishment, siteworks and early structure genuinely carry more cost and risk than the schedule of rates reflects, price them that way before you sign. The distinction between weighting and over-claiming matters: a defensible schedule survives a quantity surveyor's review, an inflated one does not, and being caught costs more than the cash was worth.
This does not apply to Victorian domestic building work. Domestic building contracts run on prescribed stages with capped percentages, and the deposit and stage amounts are regulated. Do not go reweighting a domestic contract on the strength of a blog post - including this one.
How much cash should a construction business hold?
As a working rule: enough to cover eight to twelve weeks of fixed overheads, plus the peak working-capital draw of your largest live job.
The overhead figure is the survival buffer. The job figure is the part most builders forget - if your biggest job draws $300,000 at its peak and you hold $150,000, you are relying on other jobs' receipts to fund it. That works until two programs slip at once.
A 13-week cash flow forecast turns this from a rule of thumb into a date. You stop asking "do we have enough cash?" and start asking "what does the week of the 14th look like?"
The claim timing checklist
Monthly, on every live job:
Claim date fixed in the program, with the paperwork owner named
Variations register reviewed and priced before the claim goes in
Subcontract payment terms sitting behind your expected receipt dates
Retention register: practical completion and end-of-DLP dates, with an owner per job
Live contracts reviewed against the amended Victorian Act - payment terms in particular
December claim timing planned around the 22 December to 10 January business-day exclusion
Rolling 13-week forecast updated with each claim and each approval
Anything on that list without a name against it will not happen. That is not cynicism - it is just how site administration works when everyone is busy.
What this is worth
Take a builder turning over $10M across four or five concurrent jobs. Getting variations into the current claim instead of the next one, clearing two years of stale retention, and bringing payment terms into line with the amended Act typically frees a six-figure sum. Not profit - cash. But it is cash currently being rented from a bank on an overdraft, so the interest saved is real, and the ability to say yes to the next job without a facility increase is worth more again. If a bigger facility is on the cards anyway, read what a lender actually looks at before backing a builder first - the same claim and retention discipline is what a credit assessor is checking for.
Our value calculator puts rough numbers on your own position in about two minutes.
Frequently asked questions
How often can a builder submit a progress claim in Australia?
The contract sets the cycle, and under the security of payment regimes a claimant generally cannot serve more than one payment claim per reference date - with the default reference date being monthly where the contract is silent. More frequent claiming has to be agreed in the contract, so it is a tender-stage conversation rather than something you can change mid-job.
How long does a principal have to pay a progress claim in Victoria?
Following the 2026 amendments to Victoria's security of payment legislation, commentary describes a maximum of 20 business days from service of a payment claim, overriding longer contractual terms - and applying to contracts signed before the changes commenced. Confirm your own position with your lawyer, but if your contracts specify longer terms, that is worth checking this week.
Why is my construction company profitable but always short of cash?
Because profit and cash run on different timetables. Profit is recognised as you earn it; cash arrives after the claim cycle, the payment terms and the retention hold. A profitable job can still consume six or seven weeks of your money in its middle phase. Full explanation in why profitable builders run out of cash.
What is retention and when do I get it back?
Retention is commonly 5% of the contract value held as security, with roughly half released at practical completion and the balance at the end of the defects liability period - most often twelve months after practical completion. Limits and release triggers vary by jurisdiction and contract type. Neither release happens automatically; both need a certificate and someone chasing it.
Does claiming more often mean over-claiming?
No - they are different things. Claiming more frequently claims the same total money closer to when you spent it. Over-claiming means claiming for work you have not done, which distorts your WIP position and borrows cash from your future self. Frequency is timing; over-claiming is a misstatement of progress.
See your next cash dip before it lands
Book a free 30-minute strategy session - bring your job list, your claim schedules and your retention register, and we will show you where the timing is costing you, including a straight "you don't need us" if that is the truth. Or read how we run construction cash flow forecasting, or call 1300 886 347.
This article is general information about financial management, not legal advice. Security of payment and domestic building legislation differ by state and by contract type - check your specific position with your lawyer.
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