Cash Flow Effect on Delayed Payments

Cash Flow on Delayed Payments

Cash Flow Effect on Delayed Payments

With any construction project, it is assumed changes and delays will happen.  Contractors must protect their positive cash flow by diligently complying with the contract terms.  When changes occur, are the changes covered by the scope of the work or is additional compensation available for the extra work under the original base contract?  The contractors are usually the ones who must notify the owner in a short timeframe of the changes that are out of scope of the original contract and request additional compensation.  In addition, the contractors must also notify the owner of delays on projects.  The contractors must state the conditions causing the delays and the potential costs stemming from such delays.  If the contractors do not notify the owners of the changes/delays within the appropriate timeframe, the contractors place themselves in a position to finance the projects thus creating less profits or even losses.

If you would like to go into more detail concerning cash flow effects, please call Susan at 630.523.5762. For more helpful tips on becoming a highly profitable business owner, check out Highpoint Advisory Services.


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