How to Make Sure you are getting paid as a Contractor
If you are working as a builder or independent contractor you will have negotiated a fee for your services and this will form part of your contract. While operating under a contract allows certain level of freedom it is important you are aware of when your contract indicates that you will be paid. Dependent on the terms of the contract pay can be either received on regular intervals, on a stage of completion basis or completion of the project. Contractors should also be wary of who is liable for expenses incurred during the project as incurring the costs unexpectedly may cause serious cash flow issues.
Walk through the contract
In order to reduce any potential disagreements it is wise for both parties to go through the contract and address and clarify any issues that may cause conjecture in the future. This may include circumstances that commonly cause dispute such as site access, variations of progress payments and reasons that would justify suspension and breach of contract.
Record variations to the contract
Situation may arise in which work is required to be completed which was not indicated in the original contract. If this situation arises it would be prudent to ensure the variations are put in writing and signed by both parties. Not only is this a legal requirement but It will ensure that you receive payment for these variations. Without these written and signed variations enforcing payment can be very difficult.
Payment for stages completed
In NSW no limit exists on the number of stages that can be included in a contract. For fixed price contracts a progress payment schedule which specifies the amount of the percentage payable must be included in the contract. In these circumstances the stages need to be accurately described in plain language
How to enforce your rights under the contract
If you are not paid by the due date it is recommended that you first contact the payer and discuss it. Do not disregard the non payment out of fear of embarrassment. If you continue to be unpaid you have a number of options to undertake such as ceasing work until payment of the disputed fees and subsequently terminating the contract.
Your contract should be followed when reaching practical completion of the project. This would often include performing a final inspection with both parties present and issuing the final progress claim. Providing that both parties agree on the completion of the project, the handover occurs once the final payment is completed.
If you have any issues with your contract please contact us at The Quinn Group on (02) 9223 9166. Our team of accountants at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.