Take "what goes around, comes around" into your own hands!

Construction is doing better. However, better does not always equal good. As a result of lean years in the recent past, many companies have little bacon on their bones; investment space is limited. At the same time, creative solutions are being offered to the market from various sides, for example in the context of sustainability and flexibility.

For investments to continue, it is important that where work is done, it is paid for. But how do you enforce that? With advance screening, good contract management and tight accounts receivable management! All three are equally important. After all, contracts can be well put together and you can be on top of them with your debtor management, but if you are dealing with a rogue party, debt collection will be very difficult: "you can't pluck a bald chicken".

An example of deficiency screening. A contractor had delivered a building when his client had paid only part of the installments. When the contractor applied pressure to enforce payments, it turned out that the land on which had been built belonged to a third party (and it was bankrupt). The trustee indicated that the building fell into the bankruptcy estate because the building had been built on the bankrupt's land. The contractor - after legal intervention - eventually got some payments, but certainly did not get off scot-free.

With research in the land registry beforehand, this could have been avoided. Screen a client also through the Chamber of Commerce (who is the director, has the company existed for some time?), do a background check through your network or on the Internet, review financial statements and ask for a statement of payment history. This way you will have a better idea of who your client is and you can consider whether you want to contract with this party.

If you dare to work together, you can stipulate a lot contractually, depending on what is commercially feasible. One important point is the shortest possible payment period. For example, if you as a contractor have a construction period of three months, in which you do all your work, with a payment period of sixty days, in many cases you have delivered your entire performance, while only a small part has been paid. You then no longer have any leverage, for example to stop work. Also consider the contractual stipulation of security or a retention of title on materials.

The final touch is tight accounts receivable management. If the payment deadline has passed, call right away and send a reminder, in which you declare interest and collection costs. If a payment term is not respected, do not work too long (suspend your work). More far-reaching steps may include exercising the lien or levying an attachment. However, if the steps described earlier have been taken, this should be an exception.