How the payment history of a contractor impacts your workplace communication tactics

Communication
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Communication is one of the most challenging yet crucial aspects of managing a construction project successfully. It can be difficult to decide with whom to share information when to share it, and how to communicate it. The importance of excellent communication with the appropriate parties increases with the size of a project. Construction companies in West London are best known for their services in the United Kingdom.

You can gain valuable information that will aid in developing a more successful communication strategy by investigating your customers’ credit and payment history. It holds for each building project stage, from soliciting bids to receiving payment.

How communication is impacted by payment history

Consider that you are getting ready to submit a proposal for a new project when the general contractor (GC) informs you that they won’t be paying you on time, if at all. What would you do? Even if their honesty may be admirable, I assume that any self-respecting contractor would abandon the project immediately.

The absurd part is that situation frequently occurs on residential, business, and government projects all around the nation. In the construction sector, late or non-payment is alarmingly frequent.

General Contractor

Naturally, neither the general contractor nor the property owner will disclose their intentions to withhold your money before the project begins. In reality, they probably have plans to pay everyone on time. After all, late payments hurt a company’s reputation because they lead to lawsuits and claims for liens. Nevertheless, some GCs and owners establish terrible payment habits despite their best efforts and for various reasons.

You can choose more wisely if you know the owners’ and managers’ payment histories. You might ultimately decide not to place a bid. Their payment policies may influence how you communicate with them during the project, should you decide to accept the task.

How to find out a contractor’s payment and credit history

Obtain a credit report for the contractor.

Obtaining a contractor’s credit report from a business like Dun & Bradstreet or Experian Commercial can give you information about their history of on-time bill payments, including the existence of slow payment indicators like mechanics liens. However, this service is typically only available for larger companies.

independently investigate payment procedures

You might have communication with the contractor for a list of their prior customers and suppliers and get in touch with them about their experiences. The information on Level set’s Contractor Payment Profiles, which rates payment speed and shows a 12-month history of liens and tardy payment warnings, is also available. Other construction companies have also provided evaluations and critiques of the contractor’s payment procedures on the platform.

exemplary construction communication practices

Practical communication skills will benefit you on every assignment regardless of the contractor’s payment history. It also safeguards your payment while working for a GC with a track record of payment issues, arguably even more crucial.

Always give warning

Typically, a project’s start is marked by sending a preliminary notification. It may be referred to as a pre-lien communication notice, 20-Day Notice, or Notice to the Owner depending on the state you’re operating. It gives the people in charge of payments an overview of your work and introduces you to them. Sending the preliminary notification is necessary to safeguard your lien rights in several states.

Set up a credit policy

Include a copy of your business’s credit policy with your initial invoice or pay application, making sure to note how you handle collections. Clear expectations form the foundation of relationships in a construction project. Sharing your credit policy with the contractor lets them know exactly what to expect if they don’t fulfill their obligations. Just make sure you adhere to your credit policy. Few things have the power to ruin a business partnership, like broken promises.

Utilize reassurances and demand letters

A reminder for an invoice can be helpful to make sure you get paid on time. Your client’s accounts payable team is responsible for ensuring everyone is paid on time. When it comes time to write checks, sending polite reminders before and on the due date can assist keep it at the top of the pile.

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