A healthy flow of cash is important to contractors, even when there’s not a global pandemic. But now that the spread of the coronavirus has resulted in mandatory project shutdowns in many states, a trade workforce that is scared to show up and skittish owners that have halted or stalled developments, there are steps financial experts say contractors and subcontractors need to take right now to protect their money and maximize cash.
Collect money due
The first order of business for contractors, said Scott Wolfe, CEO at Levelset, is to collect outstanding invoices.If the customer is slow to pay, Wolfe said, contractors should seriously consider securing accounts receivable with a lien. Granted, there are contractors with great client relationships, and if payments haven’t slowed down, they might not feel comfortable taking what some in the industry view as a drastic measure.
But, he added, “If there’s a chink in the armor, you want to get your lien filed because you need to be in a position to be paid in a very uncertain environment.”
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