Protect Your Business and Get Paid

As a construction manager, getting the admin done in time can help you to keep your business thriving. Taking time to communicate effectively and get everything in writing will protect you and your client and ensure you get paid on time and in full.

Taking time to draw up contracts and alter them as the build changes does take precious time from the jobsite but, should a dispute arise, you have a much stronger bargaining position.

Most contracts work on a three-step process where money is provided upfront for materials and equipment. A second payment occurs after the inspections are complete and a final payment when the work is done. This is by no means a rule and you can ask for more frequent payments to ensure cash flow and reduce your risk.

Set out the payment schedule, what triggers each payment and what the amount should be prior to starting work. Get the client to initial these steps to show they understand and accept the payment schedule.

Make it easy to pay with clear, concise invoices and accept several payment options.

In order to have their work delivered on time, clients must honor the payment schedule. Payment schedules create more paperwork, but they provide a helpful early warning sign. If a client misses a payment, you’ll only be on the hook for a small portion of the job rather than the whole thing.

Have a clause in your contract that says you can stop work if the payment schedule isn’t honored. This is very disruptive to your scheduling, but it helps to keep payments on time.

If a client asks to see receipts or time cards, this is a sure sign of trouble ahead. If you have a signed contract with a fixed price, there can be no negotiation. This often comes up when the client has changed the building plan during the build, incurring additional fess which they may balk at.

Changes that are made during construction are often the cause of disagreement. Ensure that clients understand that changing their minds about the paint color or fixtures will mean higher costs and more time. Get these changes and their associated costs in writing at every step so there can be no dispute about payments.

You have a limited time frame to collect through the small claims court from the last payment, so be aware of the time frames should your client renege on the contract. This process is costly and time consuming so try to mediate with the client to come to an agreement and use this only as a last resort.

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