Anonymised, illustrative composite. An Alberta mechanical subcontractor's invoices were averaging 61 days to collect. A third of them were missing something Alberta's prompt-payment rules require before the payment clock even starts.
At a glance
An Alberta mechanical subcontractor was carrying an average of 61 days from invoice to payment across its general-contractor clients, well past what its own cash flow needed. The assumption going in was that GCs were simply slow payers. An audit of the invoices themselves told a different story.
Alberta’s Prompt Payment and Construction Lien Act only starts its payment clock once a “proper invoice” is delivered, and the province defines that with a specific checklist: contractor name and business address, invoice date, the period the work covers, a description of the work, the amount requested, payment terms broken down, the contact who should be paid, and a statement that the invoice is intended to be a proper invoice — eight elements, all required. An audit of 40 invoices sent the prior quarter found 14 (35%) missing at least one, most often the explicit “proper invoice” statement and a broken-out payment-terms line. GCs were using that gap to treat the clock as not yet running.
The 14 incomplete invoices averaged 74 days to collect; the 26 compliant ones averaged 53 days. Weighted across the quarter: (14 × 74 + 26 × 53) ÷ 40 = (1,036 + 1,378) ÷ 40 = 2,414 ÷ 40 = 60.35 days — the 61-day average the subcontractor started with, confirmed by the math. After the invoice template was rebuilt to hit all eight elements as a fixed checklist, the following quarter’s 45 invoices averaged 44 days — a 17-day reduction, or roughly 28% faster collection.
Alberta is one of the few provinces where the prompt-payment day counts are published outright by the regulator rather than hedged: “project owners must pay the amount payable to contractors within 28 calendar days of receiving a proper invoice”, corroborated by PPCLA s. 32.3(1), which requires the contractor to then “pay each subcontractor the amount owed within 7 calendar days” of receiving that payment — or, under s. 32.3(4), within 35 days of the original invoice if the owner never pays at all. But every one of those clocks depends on “a proper invoice” having gone out first — an incomplete invoice gives a GC room to argue the 28-day clock has not started.
A GC can’t just sit on a proper invoice and call that a dispute, either: if a project owner wants to withhold payment rather than pay inside the 28-day clock, Alberta’s rules require them to issue a Notice of Non-Payment within 14 calendar days of receiving the invoice, stating the amount withheld and the reasons — silence past that window isn’t a way to stop the clock.
Rebuilding the invoice template around the eight-point checklist removed the dispute room GCs had been using and cut the average collection period from 61 to 44 days. At the quarter’s $920,000 invoiced revenue, a $10,222/day run rate ($920,000 ÷ 90), 17 fewer days outstanding freed roughly $173,780 of working capital on a rolling basis — cash that no longer sat in a GC’s accounts payable queue. For the invoicing side of this fix, see automating contractor invoicing and tracking what's owed across every subcontract. The related cash-timing fix for a different contractor is in how a cash forecast averted a payroll shortfall.
Left unfixed, the 35% non-compliance rate would have kept costing roughly $173,780 of working capital tied up on a rolling basis every quarter, not just once — at a conservative 9% line-of-credit rate, $173,780 × 0.09 is about $15,640 a year in avoided financing cost the subcontractor was effectively paying to avoid rewriting an invoice template.
Audit outgoing invoices against the eight-element checklist before they go out, not after a GC disputes payment — the checklist is free to apply and the 17 fewer days it produced is not. If a meaningful share of your invoices are missing even one required element, you are handing payers room to argue the clock has not started, regardless of how many days the contract itself allows.
Of the 14 incomplete invoices, most were missing the same two elements: the explicit statement that the invoice is intended to be a proper invoice, and a broken-out payment terms line, rather than a scattered mix of all eight requirements failing randomly. Rebuilding the template around a fixed checklist fixed both gaps at once, on every invoice, rather than requiring someone to catch each missing element by hand each time. That is also why the fix compounds the way a process fix does and a one-off collections call does not: the 17-day improvement applies to invoice number 46 exactly the way it applied to invoice number 27, with no additional effort required to sustain it.
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