They say, “cash is king”, and that applies to any business. You need to be making money to have any kind of success or stability. This is especially true for subcontractors. You need money to be coming in to sustain yourself and your business.
That shouldn’t be news to anyone, but so often, we see subcontractors leaving money behind for no good reason. Whether it’s a lack of knowledge or just laziness, it doesn’t matter. There’s no need to walk away with less money in your pocket.
Here are 9 payment claim hacks you need to know to keep your cash flow moving in the right direction and getting more money in your pocket.
1. Start with Your Tender and Contract.
Before you even start working, make sure you fully understand what you have tendered for, the scope of work, and that everything is clearly defined in the contract. If anything looks vague or confusing, call it out from the start.
Save yourself the hassle of a dispute down the line and make sure all the details are correct. It’s well worth spending the time to get this right from the start.
2. Agree on Payment Terms
This one is more important than people realise. Make sure payment terms are agreed per the payment schedule in your contract. Whether it’s 30, 60, or 90 days, having a clearly defined payment schedule ensures you know when to expect payments and helps you plan your finances better.
3. Avoid the “Paid When Paid” Clause
If you see a “paid when paid” clause in your contract, speak up before you sign anything. This clause means you get paid only when the main contractor gets paid, which can severely disrupt your cash flow. Instead, insist on direct payment terms so you’re not left with delayed payments that could create real damage to your business.
4. Find out Who Pays the Bills
Getting to know the people you’re working with on site is a no-brainer for a successful project. For a smooth payment process, it’s important to know who’s responsible for paying the bills. Find out their name and position in the business so you have a direct line in case of any delays.
5. Build a Strong Relationship with the QS
Another important relationship to build is with the Quantity Surveyor (QS) on the clients side. Meet them, get to know them and you’ll make life easier for yourself. They’re the ones checking your measures and variations. Plus, they handle your payment applications. Be professional, respectful and reliable and you won’t hit any issues.
6. Get to Grips with Your Bill of Quantities
The Bill of Quantities should be reviewed and understood inside out to make sure you have a detailed scope of work included within your contract price. Having a handle on this helps to manage project costs overall.
7. Avoid Being “Paid on Account”
Don’t fall for the “paid on account” line. No one can afford that. You have bills to pay, suppliers, plant and material costs you can’t be waiting around for the money you agreed on. If you apply for 50k, you should get 50k, no messing.
8. Keep Detailed Records
You can never have enough records. It might be time-consuming but it’s well worth it when it saves you money. There’s nothing better than proving someone wrong when they challenge you on a payment claim. Show your detailed records to justify every claim and remove any doubt.
9. Avoid Unnecessary Delays
Try not to be the reason your own payment is delayed and keep your documentation ready and up to date. Whatever the client looks for should be easy to find and share, whether that’s insurance documentation, health and safety certs or even your banking details. Scrambling around for your BIC and IBAN doesn’t look good and it could mean a delay in getting paid.
Conclusion.
Getting paid on time for the work you complete doesn’t need to be a hard-fought battle every time.
You’re willing to do the work and the client is willing to pay. Avoid stupid delays or ridiculous challenges by having your documentation and records up to date as well as a good understanding of your contract and who you’re working with.
There’s no reason to be leaving money behind anymore.
Talk to us today at Carroll Estimating to find out how we can help you save and make more money with a seamless process from tender bid to final account.