Payments and Schedules Subcontractor Headaches

by Chris Hill in March 10th, 2022

Subcontractors do 90% of the fieldwork and, 99% of the non-field work. Although some General contractors do some portion of the job, they mostly prefer specialists, trade contractors. Therefore, the majority of the burden of managing labor, billing, and scheduling is on subcontractors.

As the business grows, the amount of payments that subs have to deal with can run into millions of dollars.

payment schedule

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How to get paid on time

Cash flow is always a major subject for subcontractors. Especially for small subs, it is hard to handle the expenses, before they get paid by general contractors.

It is important to communicate with GCs about the money upfront. If you do the money talk before you sign up for the job, you will be able to see your way ahead. All subcontractors are thinking about money and payment. It is okay to talk about it with the client.

Some tips to track your payments;

  • Know the payment due dates and make sure your clients are aware of them
  • Make sure you fully completed the work that is written in the contract
  • Contact the client before the due date to make sure they know you expect a payment
  • Let your client know that you will suspend your work in case the payment is late

Why is communication important

Proper scheduling is directly related to your payments. Perhaps one of the most important parts of managing a project is building strong communication with the general contractor and other parties that will involve with the project such as labor, vendor. Keeping all parties up to date will help you to do more realistic scheduling.

When you have issues as a sub, you should contact the general contractor instead of trying something impossible. So, your GC will be aware of the situation and let you know if there is flexibility. For instance, you may have a shortage of skilled laborers and it takes longer to complete the work with the expected quality on the expected due date. Instead of risking the quality of work to meet the deadline, you can discuss it with your client.

In the very early stages, you must clearly discuss what will happen in case of delays and what is the next action you must take. Being transparent will help you to build a strong relationship with your client. And, it will help you to have a smoother process throughout the project lifecycle.

 


Source1:https://www.constructiondive.com/news/schedules-and-payments-dominate-subcontractor-challenges/514756/

Source2: https://www.streetwisesubbie.com/construction-contractor-not-paying-subcontractor/


 
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