Thursday, July 10, 2008
The work flow headache
In the past, I have no idea how a construction company runs or how is project costing administered, the payment procedures and what progress claimants are and how to go about collecting payments. Collection of payments I've known is very important to all companies but especially difficult to construction companies. This is due to the many stages of construction and work done in a project as well as things like retention. Sometimes, a customer may delay the payment as there are procedures like safety checks, verification by Quantity Surveyors then the payment preparation by the Accounts Department. Many times, demand letters have to be sent, lien release or even legal actions have to be taken before payment can be collected. This is one of the main reasons why construction companies went bust a few years ago. They have to pay their staffs as well as their own vendors while waiting for the payments. Hence it's very important to have the accurate payment collection procedures as well as experienced person to monitor the progress claims.