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When you’re in the construction business, getting paid can be tough a tough task. How often do you send out past-due invoices to your customers? What about demand letters? Have you ever had to hire an attorney to resolve a payment issue, only to end up spending more in legal fees than the uncollected payment itself? And what about the bitterest of bitter pills, writing off a bad debt? When was the last time you had to do that?

If you’ve been forced to undertake any of these collections tasks, then you really need to take a long, hard look at the effectiveness of what you’re doing now to get paid and try to determine if it’s really working. Could it be better?

We want to address this issue head-on and compare a few common ways construction companies just like yours may be tackling their payment problems currently, while also providing some other options that might be more effective.

Stop Reacting to Problems.  Start Preventing Problems

A typical business often won’t realize they’re not going to get paid until it’s already too late. Therefore, any action the business takes is going to be inherently reactionary – the payment is already late, the customer is already delinquent, and now the only thing that can be done is to scramble and try to recoup as much of the payment as possible. Outside of the construction industry, this is how much of the business world is forced to operate.

But thankfully, for over 200 years the construction industry has been set up entirely differently with regard to getting paid. This is very good news for construction industry members as its participants have access to powerful, incredibly effective legal tools that, when used effectively, can virtually guarantee payment on their projects.

Another benefit of these tools is that construction firms aren’t forced into a situation where they must react to payment problems only after they’ve already happened. The construction industry is unique in that it’s members are empowered with special tools that help to prevent payment problems from happening in the first place.

To illustrate this point about “reacting” to a payment problem after the fact, think about making collections calls to delinquent customers. Do these calls work? What’s the next step? Another call? Maybe a another call and an email?? Think about all of that wasted time, and all the better, more productive things you could be doing instead.

Read on for five examples of things you should stop doing, along with suggestions of what you should do instead. Remember: you’re in the construction industry! The tools and tactics we talk about below were specially created to protect construction companies just like yours. Why wouldn’t someone – anyone – take advantage of all the tools available to them?

One last word of advice: if doing all five of these is too much to take on at once, go ahead and start with just one or two. Every little bit helps, and something is always better than nothing!

Here Are 5 Things You Can Start Doing Today


Being the kind of company that waits for something bad to happen, then must react when it does.


Being the kind of company that proactively uses all of the tools and resources available to them to prevent bad things from happening in the first place.


Making collections calls and sending emails for past-due invoices.


Sending preliminary notices at the beginning of your projects. Companies that send preliminary notices get paid faster than companies that don’t. And in the vast majority of states, sending preliminary notice is an essential, required, first-step for companies exercising their right to secure their payments.


Sending demand letters to delinquent customers. They’re usually not worth the paper they’re printed on.


If your customer becomes delinquent, follow up with a notice of intent to lien. We think of these notices as demand letters that actually work, and they’ve been an incredibly effective tool that levelset customers have used to prompt payment from delinquent customers without having to file a mechanics lien.


Writing off bad debt.


Filing mechanics liens and bond claims the powerful tools that have been specially provided to help construction companies get paid the money they’ve earned. When used effectively, these tools can virtually guarantee payment on construction projects.


Hoping that ‘everything will work out’ is an effective strategy. It’s not.


Doing something to secure your payments, today. If you’re not sure where to start, you can always talk to us. We’re here to help you get paid. (Click the button below to speak to a levelset expert.)

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5 Things You Can Do TODAY to Put an End to Your Construction Payment Problems
5 suggestions to help construction companies put an end to their payment problems including what they should stop doing and should start doing instead
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