If you’re an accounting manager working for a general contractor, then you can probably relate to the issue we’re raising here.
According to Sarah Toulmin, Levelset’s Senior Training & Onboarding Manager, one of the most common requests she gets when training a new GC is to help them speed up the time it takes for subcontractors to sign and return lien waivers.
Of course, there is a solution here – technology! (Or email, at the very least.) But what can a general contractor do if the subcontractors they work with are “set in their ways” and don’t like to use email?
Construction Loves Its Paper
Well, if “love” is perhaps too strong of a word, then it’s fair to say that the average construction project certainly uses a lot of paper. Just managing the project payments requires several documents, including:
- the original contract
- notices (preliminary notices, as well as many others)
- pay apps and invoices
- lien waivers (of which there are 4 different types)
And of course, a single project may require multiple uses of each document.
With all of this paper going back and forth just to manage payments on a typical construction project, it makes sense that a little technology can go a long way to help make the process more efficient and much faster.
But the industry has a long history of being at least somewhat technologically averse. From the thousands of conversations we have each month with some of your industry peers, we hear first-hand that there are still many folks in the industry that are reluctant to use email. So, what can a GC do to speed things up?
How One GC Did It
Well, there is hope. Beginning with the table below, we will explain how one general contractor was able to drastically cut the amount of time it takes to exchange lien waivers. In fact, by utilizing technology, this GC was able to cut the waiver exchange process from taking several weeks to less than 2 days! And, she was dealing with 14 separate subcontractors on the project. Take a look:
Exchanging Lien Waivers:
A Comparison of Online vs. Offline Processes
The Task: A general contractor has to turn around 14 separate final unconditional lien waivers to 14 different subcontractors.
|Step 1: GC Generates the Waivers||Has to print off 14 separate waiver forms. Can be done quickly via mail-merge, but will take longer if each is done individually.||One click instantly generates all.|
|Step 2: GC sends the Waivers||Have to stuff envelopes and mail.||One click instantly emails all.|
|Step 3: Subs Receive and Sign the Waivers||This step is the single biggest source of the delay. If the mail goes to the office, how long will it sit there until the sub is back in the office and available to sign?||This step is the only significant holdup in the online process. However, this step can happen even more quickly with digital e-sign that’s even available on mobile. That means wherever the sub is – in the field, on a supply run, wherever – he can sign the waiver on his phone as soon as he receives it.|
|Step 4: Subs Return the Signed Waivers to the GC||Once again it’s time to stuff envelopes and rely on the USPS.||Instant – updates in real time “in the cloud.”|
|Step 4: GC Receives the Signed Waivers and Processes Each||Has to wait for the mail to come in. Open 14 individual envelopes, process each, check for accuracy, etc.||“Received” instantly. Processing took less than an hour.|
Total Time Required:
2-3 Weeks (or more)
>Less than 48 hours
[* The general contractor in this example is a Levelset customer and used the Levelset platform to get this result. Please get in touch with us if you’d like to find out more about how they did it, and how you can too.]
Some Helpful Advice
Here are a few things a GC can do to encourage their subs to use technology.
- At the start of the project, be sure to call each and every subcontractor and tell them that you’ll be using email to exchange waivers. Tell them that they must not ignore emails sent from you!
- Walk the subs through the options available to them. In this case, the GC is a levelset customer, and our technology allows for the subcontractors to electronically sign (e-sign) the waivers. They can even sign the waivers from their mobile phone!
- Explain to them that the faster this gets done, the faster they will get paid.
Using Email to Send and Collect Lien Waivers Benefits Everyone. But What Should You Do WhenYour Subs Insist on Using Paper? When it comes to exchanging lien waivers on a project, there really is a better way, and that way is technology. What would it look like for your projects if you could turn a several week delay into a process that could be turned around in 2 days (or even less)?
If you have any questions or would like to find out more information about exchanging lien waivers electronically, please get in touch.