Despite a reported 91-percent medium or high level of improvement in productivity, only 27-percent of general contractors have moved to automate their pay app process through software technology. It is essential for GCs to understand the key features to look for in subcontractor management software based on the findings of our latest market study done in conjunction with Dodge Construction Network. 


Software solutions for subcontractor management offer built-in automation capabilities, allowing GCs to customize workflows according to their specific needs. With automated notifications, subcontractors are promptly informed about the required documents for contract or pay app submissions.

Without this feature, managing workflows and securing approvals could become long, complex, and prone to human error. It would require a lot of manual work and constant monitoring to ensure no step is missed or delayed. Mistakes in this process can lead to substantial delays and cost overruns.

The benefits of using such a feature include:

  • Eliminating subcontractor calculation mistakes
  • Timely submission of payment applications
  • Reducing data entry

The software integrates seamlessly with existing accounting ERP systems, allowing for the direct import of job details contracts, and change orders. This eliminates the need for manual data entry, saving time and reducing the risk of errors.

Additionally, the software can notify when existing documentation has expired and needs updating. Automation significantly reduces the time spent on tracking down documents, saving general contractors and subcontractors up to 70 percent of their time.


An important aspect of subcontractor management is the exchange of lien waivers, and this is an absolutely non-negotiable feature any subcontractor management software needs. 

Manually creating and exchanging lien waivers is a time-consuming process and can increase the likelihood of errors, disputes and legal issues. It also increases the burden of administration, communication, and coordination.

Software tools simplify this process by providing standardized templates and enabling electronic exchange, saving time and reducing errors. GCs can easily generate and distribute lien waivers to subcontractors, ensuring compliance with legal requirements and streamlining the documentation process. Some of the main ways software helps automate lien waiver management include: 

  • Verifying signed waivers within pay app before approving
  • Creating custom lien waivers
  • Guaranteeing receipt of waivers with each applicable pay app
  • Managing state requirements
  • Viewing audit trail on waivers
  • Automatic notification to sub when waiver is required
  • Release unconditional immediately upon receipt of payment 

An additional benefit of software is that notarization can be easily completed by subcontractors if a general contractor or owner requires it for a given project. 


Compliance documentation as a feature is critical for subcontractor management. If this isn’t managed properly or is done manually, it can lead to significant liability risks. It’s critical to ensure all documentation is up to date and compliant with regulations to avoid penalties, legal issues, or consequences to the reputation of the business.

Software solutions allow GCs to centralize and manage all construction compliance documents, such as insurance certificates, licenses, and permits. By digitizing and organizing these documents, both GCs and subcontractors can easily access and update necessary information, ensuring regulatory compliance and mitigating potential risks.

One of the key features of any subcontractor management software should be automatic notifications to subcontractors on what documents are required with either contract or pay app submissions, and when existing documentation has expired and needs updating. 


Efficient ePayment management is essential in subcontractor management software. Traditional payment methods are less efficient, more time-consuming, and may incur additional costs (postage, cheque handling). They also lack immediate transparency or tracking of payment status. Delayed payments can strain relationships with subcontractors and disrupt work on a project.

Also, when you manage payments for your subcontractors internally and hold their personal bank data in your system, you take on the risk of a data breach that can lead to fraud. In fact, in 2021, lost business opportunities represented the largest share of data breach costs.

If all other components are automated, then a general contractor should also be able to manage and automate electronic payments as well. Letting subcontractor management software facilitate payments will save money but also eliminate the risk and exposure to potential data breaches which a general contractor will be liable for damages. 


Custom dashboards in subcontractor management software provide general contractors with a powerful tool to optimize their processes and ensure timely payments to subcontractors. Without these, contractors lack the ability to track progress in real-time or easily understand the state of their projects. Important analytics and metrics might be missed, and making strategic decisions based on accurate data becomes a challenge.

The inclusion of real-time reporting and dashboard visibility enables general contractors to quickly identify errors and pending approvals. By utilizing custom dashboards, general contractors can gain valuable insights into project-level data, SOV or contract level data, and pay app data. These comprehensive insights contribute to efficient subcontractor management by reducing errors, streamlining processes, and ultimately ensuring prompt payments to subcontractors. 


The benefits of subcontractor management software are undoubtedly helpful, but an even stronger benefit would be if all the features could easily sync with existing accounting ERP (Enterprise Resource Planning) software.. Without seamless integration, general contractors would have to manually input data into multiple systems, increasing the risk of errors and duplications. This creates inefficiencies and increases the time spent on administrative duties.

With ERP and subcontractor management systems integrated, accounting teams can eliminate double entry and have all new data mapped to their “source of truth” or general ledger software, their ERP. Without having to work in two different programs that are mutually exclusive, users can maintain their daily routine and know that new data is being mapped back and forth.

In summary, without these six features built into any subcontractor management system (or worse, done manually), general contractors may face significant inefficiencies, greater risk of errors, compliance issues, delays in payments, and lack of visibility and control over their project and financial management.  

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Modern Contractor Solutions, April 2024
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