Money seems to always be an issue for contractors and subcontractors. No matter how in demand your services are, you may still find yourself waiting to get paid. The easiest way to maintain your cash flow is to put measures in place to get paid on time. However, numerous contractors have been burned by nonpayment, so sometimes it is necessary to get advice from a knowledgeable Boca Raton construction attorney.
If you have not already, read part one for more tips.
Dispute Aging Receivables
Aging accounts receivable can be a nuisance, but not addressing them can negatively affect your bottom line. Having an in-house debt collection plan is essential for bringing money into your business. After all, you have people to pay as well. Start with a written collections policy that dictates how you will collect overdue debt, understand your rights as it pertains to debt collection, and be ready to send demand letters or open account letters.
Arrange Progress Payments
A progress payment is a partial payment that covers the work you have completed up to the point of invoicing. Arranging progress payments is a standard industry practice that mitigates the risk of nonpayment. These payments can be billed by stage or invoiced by percentage of completion. Progress payments will minimize the potential for a client to refuse payment after you have completed all of the work.
Enlist the Help of a Mechanic’s Lien Expert
If after attempting to collect the debts internally, clients still refuse to pay up, it is time to assert your lien rights. You can send the client a notice of intent to lien letter. This document warns them of your intent to file a lien. The statute that governs mechanic’s lien law is complex and is not something you think about after nonpayment. Taking steps to preserve your lien rights should begin before you start any project. Contractors and other lienors will benefit from the guidance of a Boca Raton construction lawyer.
At Cotney Construction Law, we are well versed in Florida lien law and can ensure that you send the proper notices and meet every deadline required under the law. Our attorneys have extensive experience preparing all lien and bond documents.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.