Sadly, late payments are the norm in the construction industry. As a matter of fact, getting paid on time is the exception rather than the rule. Our Jacksonville construction lawyers know that, for contractors, not getting paid can have a disastrous effect on cash flow and the bottom line. The following three techniques will speed up your payment process.
Always Send Notices
Even if you are not required to send a notice, we highly recommend you send one anyway to secure your lien rights. It’s good business practice to make sure other parties know you are working on the project. When it’s time to pay for services or materials furnished on the project, this visibility will give your payment priority above all others. If you are not paid, instead of having to file an expensive mechanics lien, your preliminary notice may be sufficient enough to secure payment.
Stay on Top of Waivers
Lien waivers are so intertwined with the construction payment process that it’s vital you get familiar with them. This document basically states that for payment, you waive your right to file a future lien against the property. If you want to receive your payments promptly, send or sign the lien waiver promptly. This document is like a receipt and keeps the entire payment process fair for all parties. Some construction professionals are becoming more engaged in technology and automating their processes to avoid delays and to get paid faster.
In construction, you cannot be reactive. Always find ways to keep your business operating efficiently and effectively where cash flow is concerned. Some helpful tips for speeding up payments include sending out accurate and timely invoices and managing your credit and collections policy well.
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.