Level With Me By JeremyWyatt
What You Can Do Right Now to Increase Year-End Cash Flow
Bills; bonuses; payroll; taxes; holiday parties; PTO; weather-related project costs. The end of a year is an expensive time, and more so if your customers aren’t paying fully and on time. I get to work with contractors every day of the week to get them paid for monies overdue and unpaid. But hiring outside help has its obvious costs, and sometimes it is best when contractors can engage in educated “self-help” in collecting stubborn debts.
months ago? You may still be owed 10% of your contract, and that’s real money!
Follow the Rules —Make sure that you aren’t the cause of any payment delay. Does your contract require payment applications to be submitted by the 20th of each month? Then make sure yours are in by the 19th. Are you required to submit written proof for all change order work? Then don’t drive an extra screw without a signed work ticket. And never, NEVER sign a lien release without carving out unpaid amounts. If you have a legitimate claim, then ignoring the requirements in your contract is no better than throwing up roadblocks in your own path. Use Your Tools . . . On Time — If you’ve followed the rules and still can’t get paid, it may be time to escalate. Contractors have two crucial tools in escalating a pay- ment dispute . First, for most private projects, you can file a mechanics’ lien. This is a powerful tool because it puts pressure on the project owner and any funder (like a bank) to fix your payment problem on pain of foreclosure. The other crucial tool is payment bond claims. On most public projects and some private projects, you can access the general contractor’s payment bond to recover unpaid monies. Here’s the catch — both of these tools have very tight timeframes, and if you miss the deadline, your rights typically are gone.
So here are five things you can do without calling your lawyer that can increase your cash flow as we sprint to the end of 2018:
Bill, Bill, Bill —The first step is making sure you’ve actually asked to be paid everything you are owed. Did you perform extra work on that one project? Submit a change order request, and then bill for that extra work. The same goes for acceleration, delays, and any other costs that you haven’t submitted as of today. Capture all of your project costs, because you can’t get what you don’t ask for. And don’t forget retention! Remember that project you finished 9 “If you have a LEGITIMATE claim, then ignoring the requirements in your contract is NO BETTER than throwing up roadblocks in your OWN path” 1
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