In September, Construction Dive published the article The Dotted Line: How Contractors Ensure the Project Owner Can Pay. As a contractor, you understand the critical necessity funds—or lack thereof—play in construction projects. Slow payments suck, while timely payments allow you to pay employees, other subcontractors, suppliers and vendors and finish construction projects on time and without disputes.
In the latest Dotted Line feature, Construction Dive breaks down the ways you can find out if a project owner has the financial capabilities to support the project – and pay you. Here are a few of our key takeaways:
- Contractors can ask for proof that the owner has enough financial backing in place to pay the project bills on time. This can happen twice: before the project begins and during a project, but only if there’s reasonable evidence for financial instability that effects a contractor’s work performance.
- Subcontractors must rely on the general contractor. Because there is no contractual relationship between the project owner and subcontractors, the general contractor has to vouch for financial information.
- What’s keeping contractors from asking for the financials on construction projects? The fear of tension and/or retaliation from the owner. Some owners even try to strike this clause from contracts completely, asserting that the terms of its project financing are not the contractor’s business.
Alleviate Tension + Guarantee Payments
How can contractors ensure their projects are protected? By utilizing construction administration software like DrawAlert. DrawAlert supports full financial controls on every single construction project. This opens up lines of communication between all parties on the project and creates a respectful business relationship in terms of project financials.
DrawAlert supports a full audit trail of the release of funds, payment confirmation at the prime contractor, subcontractor, and supplier level, and supports a complete audit trail for construction projects.
Exercising your right to project financials shouldn’t be a hassle. Make it simple with DrawAlert.