Getting Payment From Customers

Contractors know that working with customers can be a challenge at times, especially when it comes to getting paid. Customers will often delay payment or even avoid paying contractors at all for a variety of reasons. Maybe they’re extremely picky and want you to fix a bunch of things before they’ll pay you. Perhaps they want to argue with you about your contract. Sometimes clients don’t have the funds available and are waiting to get paid. In some cases, they may have just simply forgotten.

Unfortunately, unpaid invoices happen a lot and can be a real burden. Contractors need constant cash flow and not getting paid on time can lead to a domino effect of sorts. When you don’t get paid, you can’t pay your workers or suppliers.

It can be hard to focus on both building and bookkeeping. Here are some strategies to ensure you get paid what you are owed.

Have Clear Contracts in Place

Make sure your contracts clearly outline the scope of work, payment terms, and late fees. The focus should be on clarity.

Set Payment Milestones

Don’t wait for project completion; depending on the size of your project, that could take many months. Instead, set payment milestones so you can get paid at least monthly. This will improve your cash flow.

Remind the Client

Start with an initial reminder, like a polite phone call or email. This can often resolve the issue.

But if not, escalate to a written reminder. Keep records of all communication in case of potential legal proceedings.

Involve a Collections Agency

If the client still refuses to make payment, you may need to get a collections agency involved. Determine how much is owed and assess the client’s payment history. You may also want to consider your ongoing relationship with them before turning things over to collections.

Take Legal Routes

Whether you turn over the nonpayment to collections, you do have other options. A construction lien is a possibility. You have the right to claim a lien on the property if you have performed work on it but have not been paid. Consult a lawyer who is experienced in construction law so they can give you solid advice and help you understand your legal options.

Keep the Business Rolling

Running a business is not easy and sometimes business owners make mistakes along the way. Sometimes the best teacher is experience. Learn your lesson and avoid future payment issues by making changes to your payment policies.

Communication is important. Have an honest dialogue with your client to see what is going on. Maybe they are experiencing temporary financial hardships. Negotiating a payment plan could be helpful.

Also, have construction bookkeeping software in place. This can help identify patterns of late payments or other red flags. Software can also help with invoicing and automated reminders.

Contact Us Today

Working with customers can be challenging. Know how to get the payment you are legally entitled to receive.

Get the help you need from a Florida construction contract lawyer from Linkhorst & Hockin, P.A. We represent Florida contractors and subcontractors in all sorts of construction law matters. Schedule a consultation with our office today by filling out the online form or calling 561-626-8880.

Source:

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