Construction Payment Blog

There are four basic reports that make up the core financial statements of a construction company: Balance Sheet, Income Statement (or Profit and Loss Statement), Cash Flow Report, and Work-in-Progress (WIP) report. We’ll take you through each of them and describe what they mean – and how they can help contractors improve access to credit, bonding capacity, and cash flow overall. Unless you’re an accounting or money geek, the thought of reviewing these reports may…
Mechanics lien rights are statutory rights, which means that you must comply with specific legal requirements in order to exercise these rights. And courts are typically unafraid to enforce those requirements strictly. Often, requirements include when and how to sending notices and other documents. Typically in Pennsylvania, improper notice can invalidate a mechanics lien. However, a court in Pennsylvania declared in 2019 that even though a subcontractor didn’t send their notice by the proper means,…
If you’ve gone unpaid while working on a construction project in the Green Mountain State, then a mechanics lien might be exactly what you’re looking for. A mechanics lien is one of the most powerful tools for contractors and suppliers to protect their rights to payment. This how-to guide will provide you with everything you’ll need to know about filing a mechanics lien in Vermont. Table of Contents Before you file: Make sure you have…
You just received a demand letter from a sub or supplier. It says something about…a prompt payment law? It even threatens interest penalties and potentially court costs if you don’t pay. Yikes! How should you respond when you’re facing a prompt payment demand from someone on a construction project? Does the law really say you need to pay interest and fees on the outstanding amount? Before we get into that – and we will –…
Change orders happen on nearly every construction project. While they’re often necessary, they can be confusing, and and feel just like extra unnecessary work. But performing work – without written approval – that wasn’t in your original scope of work can severely affect a construction company’s right to payment. In a court case out of Kansas, an electrical subcontractor learned the hard way that performing work with unapproved change orders can cost you. Table of…
A mechanics lien is an incredibly powerful tool to ensure payment on a construction project. Given how effective they are, they must be kept in check to avoid any frivolous claims. One way the state of New York has tried to keep these claims from getting out of hand is by providing owners with the ability to request an itemized list of labor and materials provided known as a Section 38 or itemized statement demand.…
Getting paid on a construction project in California is complicated, and no two construction jobs are alike. Whether you’re an honest construction business that’s struggling to get paid, or a property owner who got burned by a predatory contractor, the answer to each payment question can be difficult to navigate. The situations can vary wildly, from the routine to the totally unique. Peter Ryan, an attorney at Hunt Ortmann in Pasadena, has fielded a…
All residential contractors working in Maine should be aware that all of their contracts must be writing under the Maine Home Construction Contract Act. A violation under these provisions can lead to financial penalties and can jeopardize mechanics lien rights. The penalties for building in Maine without a contract can be seriously steep, as one residential contractor found out. This should be a lesson to contractors everywhere: Always get that contract in writing!  Table of…
If you’ve gone unpaid while working on a private project in Wyoming, you may want to consider filing a mechanics lien. A mechanics lien is one of the most powerful ways a contractor or supplier can protect themselves from non-payment. This how-to guide will provide you with everything you need to know in order to file a mechanics lien in the state of Wyoming. Table of Contents Before you file: Make sure you…
In 2019, these U.S. contractors had the highest rates of on-time payments to subcontractors and suppliers.  Fast or on-time payments improve outcomes for everyone on a construction project. Good payment practices reduce lien risk for property owners, improve cash flow for contractors and suppliers, and improve relationships on the job. But on most projects, construction payments are made in the dark, with little-to-no transparency into the process. Levelset’s newly updated Contractor Profiles platform is making…