Ensure Final Payment – The Actions You Can Take

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Final Payment

It is common in large projects operating on serious budgets for final payment to be delayed. This is often the payment that contains the contractor’s profit. For this, and for the five reasons listed below, having a final payment checklist for each project is important.

Have All Other Party Obligations Been Completed?

Just as the general contractor may have a set of obligations to complete at the end of a project, so too do any sub-contractors, architects or engineers overseeing the project, the project manager, any other parties.

There’s more that needs to be done once you have completed your part of the job. You should require sign-off by each party to indicate their obligations are complete and acknowledging that others have done their part so that your payment isn’t delayed.

Ensure Mechanics Liens are filed correctly 

If there were mechanics liens filed during the project, the project manager will ensure that the liens have been released. This removes any encumbrances on the property for the property owner. You can ensure that all contractors are up-to-date on their payments and serve as a useful reminder for any liens if filed. Signing off on lien paperwork provides another piece of evidence should payments become an issue in the future.

 

Speak to a Lien Specialist

 

The Owner and Contractor’s Formal “walk-through” List

the owner and contractor generally do a formal “walk-through” when a job is in final stages. The purpose of this ceremony is to generate a list of items that need to be completed before the owner will sign off on the project and ultimately hand over the final check.

Make it your business to know when that formal “walk-through” is happening. More important, is to know what is on that list of final items to be completed and know exactly what needs to happen for you to get paid.

Outline the Time Frame 

Clarify the time frame associated with the completing steps, especially if it falls within the responsibility of another party. For items on the final payment checklist, Setting reasonable time frames for the completion of these final steps will help you anticipate when payment should arrive.

Get Approval From Finance

For complex projects, providing a summary sheet of all the work completed on top of the actual documentation, along with each signature, makes the finance administrator’s job easier. When they can quickly reference that everything is done and everyone agrees, they can get your check out the door.

National Lien & Bond helps construction companies manage their mechanics lien process

Ensure your entire workflow is smooth and documentation is in order. Your entire staff should understand each step and why it’s important. If you have projects in multiple states, the business process of tracking jobs, payments, and liens can get complex. NLB offers an in-depth custom seminar that covers final payment checklists and much more. Fill out the request form to see if your company is eligible to receive a custom lien seminar.

 

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