Contractors may or may not require customers to provide partial payments before work begins but generally end up with an amount due when all of the work completes.

Many customers happily pay invoices on time while others sadly do not. This puts contractors in a tough spot and forces them to decide how to best receive the payments they deserve.

Internal collection efforts

In some cases, a contractor may determine that pursuing collections in full makes the most sense. The contractor may personally call the customer or assign a staff member to call the customer.

ForConstructionPros.com recommends that the caller review all documentation prior to the conversation. This allows the best ability to respond to questions or comments in real time and may prevent delaying the payment even longer. Providing customers the ability to make a payment via phone may also help resolve an outstanding bill efficiently.

External collection agencies

Some companies find the use of a third-party collection agency beneficial when pursuing repayment from customers. This approach does require contractors to carefully select an agency with ethical practices.

Arbitration and mediation

According to Levelset, some contractors opt to include clauses in their original contracts that mandate the use of mediation or arbitration to determine payment disputes. These alternative dispute methods, however, may interfere with a subcontractor’s ability to place a mechanic’s lien on a job, therefore requiring careful assessment up front. Mediation may benefit both parties when disputes center around change orders. Arbitration may benefit both parties more when the dispute centers around the final amount due for the entire job.