7 Subcontractor Management Mistakes GCs Make (+How to Avoid Them)

 

Ever feel like subcontractor management is one dropped ball (or miss) away from chaos?

You’re not alone. Quite literally.

In fact, 40% of general contractors (GCs) report subcontractor management as their top project pain point, with 30% citing administrative tasks eating up over 15 hours weekly.

Miscommunication and poor data tracking also contribute to 48% of construction rework. That’s a huge hit to your bottom line.

Subcontractors are the backbone of every construction project—from your electrical and HVAC pros to your framers and finishers. Without them, projects grind to a halt. But keeping track of dozens (or even hundreds) of subcontractors across jobsites, timelines, and pay schedules? That’s where things fall apart.

Delays. Disputes. Disorganization. One misstep can quickly snowball into budget overruns, missed deadlines, or even legal headaches.

Let’s dive into the 7 most common subcontractor management mistakes general contractors make, and more importantly, how to fix them using subcontractor management software that’s built for the way you work using powerful platforms like Construction365. Designed for the way you work, Construction365 leverages the power of Microsoft Dynamics 365 for Construction, Business Central for Subcontractors, and other Microsoft solutions for general contractors to streamline operations, boost collaboration, and reduce costly errors.

 

1. Disorganized Subcontract Agreements

AKA: Subcontracts Stuck in Legal Limbo

Still managing subcontracts through emails or scattered Word docs? You’re risking missed terms, outdated clauses, and costly disputes. Without standardization, approval workflows get bottlenecked, and version control becomes a guessing game.

✅ How to Fix It:

Modern subcontractor project management software like Microsoft Dynamics 365 for Construction automates subcontract creation and approval workflows. Agreements are linked to project budgets and schedules, streamlining approvals and eliminating manual data entry. 
 

2. Limited Visibility into Subcontractor Status

AKA: The Report Black Hole

What’s the status of that vendor’s progress? Is the budget still intact? Without live reporting, you’re constantly piecing things together from countless sources or playing tag with project managers. It’s reactive, not proactive. And that delay costs you.

✅ How to Fix It:
Use subcontractor management software to generate real-time reports by job or vendor codes. Track invoices, payments, and balances in one place. Tools like Business Central for Construction offer live dashboards that enhance accountability and prevent budget surprises.
 

3. Inefficient Document Management

AKA: The Document Dumpster Fire

From change orders to purchase orders, subcontractor documents are often buried in random folders, inboxes, or shared drives. When something goes wrong, finding the full picture is nearly impossible.

✅ How to Fix It:
Construction management software for subcontractors centralizes every document—making audits easier, orders traceable, and your workflows headache-free.
 

4. Poor Coordination of Vendor Tasks

AKA: The Vendor Jungle

You’ve got dozens, maybe hundreds, of subcontractors. Tracking who’s assigned to what task or job number can turn into a logistical nightmare. One missed connection between a task and a vendor, and your timeline starts to slip—fast.

✅ How to Fix It:
Subcontractor project management software lets you assign vendors to job tasks along with budgets and actuals, helping you spot bottlenecks and budget issues before they happen and keep every team accountable.
 

5. Lien Waiver Complications

AKA: Lien Waiver Roulette

Lien waivers are essential for compliance and protection—but tracking them manually is risky and inconsistent. Miss one, and you open yourself to payment disputes or legal headaches.

✅ How to Fix It:
Use software to track the receipt of preliminary lien notices issued by subcontractors, which is automatically tied to the subcontract record, affecting payment functionality. This lets Accounts Payable staff know that they need to obtain the lien release before payment. The best solutions allow you to attach the received lien release right to the subcontract to ensure that the process is bulletproof.  
 

6. Cash Flow Chaos with Pay-When-Paid Terms

AKA: Pay-When-Paid Purgatory

Managing cash flow when paying subcontractors depends on your clients’ payment is a daily tightrope. Without automated tracking of which invoices have been cleared by the customer, subcontractors are left waiting—or worse, overpaid.

✅ How to Fix It:
Smart software supports pay-when-paid logic, meaning subcontractors are only paid after you receive client payments—automatically. It improves cash flow visibility and reduces financial strain on your operations.
 

7. Insurance Coverage Oversights

AKA: The Insurance Expiry Surprise

Letting a subcontractor work with expired insurance puts your jobsite and business at risk. It can also drive your own insurance premiums higher. But most systems don’t flag it until it’s too late.

✅ How to Fix It:
Track Certificates of Insurance (COIs) for every subcontractor. Get automatic alerts for gaps or expirations. Platforms like Microsoft solutions for subcontractors ensure compliance before any payment is released.

It’s a lot. And it adds up. But it doesn’t have to be this way.

Stop Managing Subcontractors the Hard Way. Meet the Tool That Brings It All Together.

Managing subcontractors shouldn't feel like a guessing game. With the right subcontractor project management software, you can turn chaos into control.

Solutions like ProjectPro, built on Microsoft Dynamics 365 Business Central, are tailored to simplify subcontractor management—from lien waivers to real-time reporting. Whether you’re a GC handling dozens of trades or a subcontractor juggling multiple projects, the right platform keeps everything organized, compliant, and on schedule.

Say goodbye to duct-taped workflows. Say hello to clarity, control, and confidence. It’s time to manage subcontractors without migraines. Let ProjectPro show you how. Book your demo now!