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Jan 27

E378: Managing Subcontractor Payments

Keep control of your projects and cash flow with proper subcontractor payment management.

 

  1. Avoid the common pitfalls
    1. Don’t rob Peter to pay Paul – pay all bills associated with a project draw when you get paid
    2. Over-payment on work performed
    3. Sub-tier sub and supplier non-payment – collect lien releases
  2. Setting up for success
    1. Every sub must have a subcontract agreement
    2. Make subs create a schedule of values and review it
      1. Match to Owner SOV if possible
    3. Clearly outline your billing procedures
  3. Making it work for everyone
    1. Communication is a key
      1. Make sure everyone understands how you manage payables
    2. Review the SOVs when progress payments are submitted – don’t wait
    3. Pay quickly when you get your money
      1. I prepare everything prior to receiving payment so I can push a button once the money is in my account
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