We specialize in all issue relating to debt recovery and collections. We’ve worked with companies such as National Collection Services. We have experience in motivating debtors to pay. We will advice you regarding the method of asset recovery that is in your best interest in your situation.
When appropriate, we will take immediate legal action and use every legal means to pursue judgment and resolution of your claim. After judgment has been rendered we will pursue the best method for recovering your assets. We are not a collection agency that simply makes repeated requests. We will take aggressive action now.
Each situation and each debtor is different. Talk with us about solutions to your debt recovery issues. We’ll be glad to help. We will discuss with you the difference between contingency fees and hour fees and help determine which is best for you. We’ll let you know what documentation we need in order to proceed.
How It Affects The Owner
The cash-flow needs of most contractors require that they vigorously pursue their right to payment. It is the nature of construction work that contractors require dollar volumes many times in excess of their working capital. The subcontractors and those general contractors that actually perform work must pay for their labor weekly and for their materials and overhead on a current basis. If they are unable to collect payments on tie, they have immediate cash-flow problems. Therefore, it is important for contractors to ensure immediate collection of money for work performed. Moreover, when contractors are not paid immediately and cannot meet their own costs, the owner will ultimately have to pay higher construction consts. If procedures can be introduced to ensure that payments reach the subcontractor or supplier for whom they are intended, this will cut the costs of construction.
The general contractor must have an adequate amount of money due and payable a the proper time in order to finance the work of each subcontractor as well as the work that the general contractor will perform directly. For this reason, the contract must specify th amount, method, and time of payments to be made by the owner to the genral contractor and the percentage of retention (if any) to be witheld from progres payments by the owner. The general contract must also specify accurately the scope of the work to be performed and the time within which the work must be completed. In addition, provisions are necessary to establish fair and precise procedures for handling changes in the work to be performed.
The Contract Provides The Payment Terms
Owners should pay special attention to the payment clauses that control the contractors’ cash flow. It is very expensive for the owner not to pay adequate attention to the payment clauses because they may inadverently put the project contractors in the “banking business.” That is, if the payments are not received by a contractor in time to actually finnace the labor and materials, it will have to pay out of pocket for expenses and wait to be reimbursed. In essence, the contractor will be financing the construction.
The contract must answer two questions in the payment clauses: “How much is the contractor to be paid?” and “When is the contractor paid?” In answer to the first question, the general contract must specify the total amount of payment in return for performance of the construction. Although there are variations in payment clauses, there are two basis ways to calculate the compensation that the contractor will receive under the contract: by fixed price (lump sum) and by cost reimbursement (costs plus a fee).
The construction work required to be performed under the scope of work provision of the general contract is the other side of the payment coin since payment and scope of work depend on each other. Thus, an owner must pay as much attention to the scope of work provsion as it does to those provisions concerning payment.
The question “When is the contractor paid?” involves progress payments, retention, and final payment. These payment terms govern whether the conractor will have an adequate amount of cash flow to cover certain costs and expenses during construction. Contracts shsould specify a certain date on which payment is to be made each month, and the owner should attempt to make the payment on that date.
The contract should clarify whether the progress payment provision includes payment for materials and equipment suitably stored at the site or at a suitablem off-site location as well as for completion of the work in place. It is to the owner’s advantage to provide that progress payment clauses in the contract include payment for stored materials and equipment. Otherwise, the contractor may have a serious cash-flow problem that will translate into extra costs for the owner as well as scheduling and completion problems.