Friday, July 17, 2009

How To Get Paid as a Contractor or Construction Company

http://www.entrepreneur.com/magazine/entrepreneur/2009/july/202254.html

This is a great article from Entrepreneur Magazine about how to get paid. Particularly in this economy, I think this is one of the biggest issues my clients are facing. One of the major mistakes that I see clients make is their failure to bill on a regular basis. Do not wait until the end of a project to hit a client with a major bill!

First of all, there should be a clear payment schedule in every construction contract.

Second, there should be a penalty for overdue payments.

Every contractor or construction company should include a clause that entitles them to attorney's fees if they have to engage legal help to pursue payments.

The article does not warn about businesses who are trying to collect from consumers. They have to be careful not to violate federal and state debt collection laws.

Make sure that ALL change orders are in writing and clearly spell out how they affect the price and completion schedule.

Subcontractors should avoid "pay when paid clauses."

I could go on, but it's late. Follow these practices and you are more likely to get paid!