Many contractors in the construction industry complain about the difficulty of keeping their accounts receivable and payable in sync with one another. Accounts receivable cycles invariably lag behind accounts payable cycles. However, that is no excuse for subcontractors, suppliers and the like to not receive timely payment for goods and services rendered.
Placing a priority on preparation
A contractor can be proactive and acquire a temporary credit line while the project gets off the ground so that all financial obligations to subcontractors and suppliers get met in a timely manner. The extra attention that it takes to make sure all billing documents are correct can save an extra billing cycle in delayed payments.
Protection from the law
Florida law provides statutes that address the payment of uncontested contract fulfillment for both public and private construction projects. Florida Statute §255.071 addresses timely payment for public projects. Private projects are governed by Statute §713.346
If the contractor has been paid for the subcontractor’s work over 30 days ago, and still hasn’t paid the subcontractor, a remediation process can begin. When a subcontractor or supplier initiates legal action under Florida’s construction lien laws, the contractor has to respond, under oath, within 30 days. Subcontractors may also receive:
- An explanation of how the contractor used the client’s payment
- An injunction against the paid contractor
- An attachment on the contractor’s assets
- Reimbursement of legal fees if the lawsuit is won
Explore your options
It can be a complicated matter to recover payment due from a contractor when there are several mitigating facts and circumstances. This is why it is preferable to retain the services of legal counsel, so that you can continue running your business while pursuing your rightful compensation.