5 ways to reduce the risk of late payments in the construction industry

March 24 2017   09 AM  

In Australia late payments has been identified as the no.1 challenge facing small business. Within the industry the subject of payment can often be a bit of a taboo, let’s be honest, nobody likes to ask for money and it is especially unpleasant having to ask for it a few times as a matter of urgency. In my experience, it is usually the subbie or the builder working on contract who pays all of their guys weekly that gets into trouble with cash flow. 

I’d like to take a look at 5 ways to reduce the risks with and without technology:

1. Signed Agreement
I know this sounds simple, but a signed agreement with clear dates and progress payment milestones can make it a lot easier put pressure on if they are not kept to.

2. References
Do you know anyone who has worked with the builder before?? Always ask for a reference. Or even better, check their ConX profile to see how other contractors have rated them.

3. Proof of funds
If you’re working for a client directly, it is reasonable to ask for proof that they have the funds available, or access to the funds in order to complete the job, the higher the job value, the more important this becomes.

4. Progress payments
Set pre-determined payment milestones and make sure this is adhered to every step of the way. Apps such as Progress Claim can manage claims for you.

5. Automation
With the introduction of technology and cloud based invoicing systems, tracking payments has become so much easier and more efficient. Get yourself setup with good Accounting Software to create and send invoices instantly with a simple ‘pay now’ button attached. This allows payment from any device anywhere in the world. Personally, I’m a big fan of Xero.

Our main goal at ConX is to make life easier and less stressful for tradies, subbies and contractors. 2 of the biggest stress contributors are finding work and getting paid. We believe by making the industry more transparent we can alleviate this.

Set yourself up with a free profile today and stay up to date. www.conxjobs.com