Getting Paid! Collection Tips For General Contractors
Performing quality work and offering first-rate customer service will go a long way in creating a reputation in the construction industry; but longevity in the industry comes from making sure your collection process is air tight.
Most contractors work on tight deadlines and margins, making it important to get paid and to get paid on time. That can be a difficult task, especially when there aren’t any specifics included in the work agreement.
Below are a few tips for contractors that can help streamline the collection process to get you from one job to the next as quickly as possible.
Get A Down Payment
It doesn’t have to be a large portion of the overall project, but getting at least some of the money up front can go a long way to creating a partnership. It by no means ensures that clients will pay the rest of the bills. It sets a precedent, letting clients know that there will be a timeline that will be adhered to for payments.
Set Payment Deadlines
A lot of contractors may wait to get the full payment at the end of the project or ask for money at random points throughout the project. This can leave you out to dry if clients don’t pay at the end or it can cause friction if you ask for money, but didn’t set any timelines for payment when the project started.
One of the best ways to make sure you get paid and to protect yourself is to set up specific payment deadlines. The deadlines can be based on completion of a certain part of the project or a specific date. The important thing is that all parties involved understand when payments will be made and the consequences of not receiving a payment.
Get Everything in Writing
When it comes down to it, if it’s not in writing, it can be difficult to force someone to pay for something. An initial contract is a great start and can provide an overview of the entire project, but it is also important to update the contract for any additional work or any changes to the agreement.
How often does a project go from start to finish without there being at least one change? Not very often. And in the case when a client refuses to pay, if you didn’t update the contract for the additional work, your chances of getting paid go down considerably.
Doing great work as a contractor will definitely grow your business, but if you are constantly fighting to get paid for the work, it will be difficult to truly grow your business.
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