Zlien just finished exhibiting at the 2012 CFMA Annual Conference in Orlando, Florida, and where there are trade shows, there is a gluttony of industry software exhibitors. That was the case in Orlando as well.
I was particularly drawn to a few companies who provide “Payment Management” utilities to contractors because of their relationship to our offerings. These payment management packages keep track of pay applications and payment obligations for general contractors and subcontractors. One unique feature that is directly relevant to what we do is that these programs will track preliminary notices and lien waivers.
What does that even mean?
Well, whenever a contractor receives a preliminary notice, he has a heightened interest in making sure the notifying party gets paid on the project. If the contractor doesn’t ensure payment, he could be staring at a mechanics lien claim. Further, when the end of the project arrives, the property owner will withhold payment until the contractor can demonstrate the property is and will continue to be free and clear of liens.
So, these programs track who delivers a preliminary notice and matches those notifying suppliers and subcontractors with their applicable lien waivers. For ever notice that is delivered, therefore, the contractor is interested in collecting lien waivers. This ensures that the subcontractor or suppliers is paid and won’t be filing a lien.
Did you catch the significance of that?
These programs exists so that general contractors can keep track of whether or not you are paid, with the goal of getting you paid and making sure the project is free and clear or liens. Wouldn’t it be nice to have the general contractor managing your specific payment and making sure the project funds trickel down to you!
Last year I published an article here titled “Preliminary Notices Will Prioritize Your Invoices, In Addition To Preserving Your Lien Rights.”
The point of this article was simple. Sure, preliminary notices are important because they preserve your mechanics lien rights and secure your account with the project’s jobsite. A huge power of the preliminary notice goes overlooked, however, and that’s the priority it gives your debt. Property owners and prime contractors really elevate your company to the top of the list when it’s time to make payments, because they know they need to.
The fact that software is out there to track your preliminary notice and ensure you get paid is proof. It’s also proof of another issue: That preliminary notices will not scare your clients. They get these things all the time. There is even software to manage it!