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Collecting outstanding construction receivables is an ongoing challenge for contractors, subcontractors and suppliers. Balancing cash flow and relationships is a delicate balance for businesses – while the overall goal of your work is revenue, the debtor may be facing their own challenges in collecting payment or finding a way to make others honor their agreements. Below are some steps and procedures for effective payment claims that are a regular part of the business. Trust your instincts When others delay payment and excuses pile up, trust your gut feeling that something might be wrong. Being too lenient can cost your business more in the long run. Pay attention to any signs that suggest payment issues and act on them promptly. Invoice promptly and consistently The sooner you send out your invoices, the sooner you can expect to be paid. Establish a regular billing cycle, whether bi-weekly or after completing certain stages of work. Consistent billing helps with cash flow and provides a solid record if disputes over payments arise. Protect your payment rights Don’t let promises of future payment distract you from important deadlines related to your payment claim rights. Ensure you know these deadlines and act before it’s too late. Sending out late payment reminders can also reinforce your awareness of your rights. Keep track of deadlines It’s crucial to calendar all the deadlines for mechanics liens, payment bond claims, and contract dispute notices. A sound office calendar system can help businesses stay on top of dates and ensure you don’t miss any critical deadlines. Never give away your rights Be cautious about lien waivers, whether they’re standalone or attached to checks. Understand what their payments are for, and never sign away your rights for more work than you’ve been compensated for. Confirm the amounts owed Getting written confirmation of the amounts owed can serve as strong evidence for your payment claim. This confirmation can be crucial when facing deductions or other attempts to reduce your claim amount. Know and follow your contract’s dispute process Familiarize yourself with your contract’s dispute resolution process and follow it closely. It can include anything from providing notice to participating in mediation or arbitration. Skipping steps could hurt your claim. Collect evidence from third parties Ask for written proof if you’re not getting paid because of various excuses. Collecting this evidence can help you challenge these justifications and strengthen your case if you need to take further legal action. Prepare for pre-collection discussions Before entering mediation or negotiation, ensure your claim file is organized and complete. Being prepared shows the seriousness of your claim and increases the chances of a favorable outcome. Move to the collection phase if necessary Once you’ve exhausted all informal resolution methods, it may be time to proceed with formal collection efforts. If you haven’t filed liens, a construction law attorney can guide you through this process. They can also help send formal notices to sureties or draft demand letters. When choosing an attorney, pick one with experience in construction law specific to your project location.