The preliminary notice is one of the most potent weapons in a credit manager’s arsenal. It’s fairly common for credit managers to send these documents on projects in states like Texas, Florida, or California, in which sending preliminary notice is required to secure lien rights. Read on to see why credit managers should send preliminary notice on every project.
So, why should they?
By sending a preliminary notice at the beginning of every project, a credit manager can provide transparency to the other parties up the chain (hiring party, other contractors, property owner) on the construction project.
Maintaining open communication is generally appreciated, which smooths the payment process and builds better relationships with clients and collaborators.
Not only is it a best practice for a credit manager to send a preliminary notice at the beginning of a project, this is the first step in protecting lien rights for work performed or materials supplied.
Even when preliminary notice is not required, it often speeds up the payment process and helps you avoid getting paid late or not getting paid at all.
When a credit manager sends a preliminary notice, this prioritizes invoices and allows for faster payment when the other parties on the project know who to pay (especially those credit managers that have an organized credit policy in place).
So now you know why credit managers should send preliminary notice on every project.
Another great step to take after informing the parties on the project, is to send a notice of intent in order to secure payment before attaching a mechanics lien to the property where work was performed.
It’s fair to say that most parties that send preliminary notices and notices of intent rarely have to file liens.
Furthermore, by implementing a software solution, a credit manager can take full advantage of the lien and notice process to send notices more efficiently, track lien deadlines in every state, and make valuable use of their lien rights.