As a contractor, you know that it can be difficult to get people to pay for your services. In fact, some construction companies will demand payment upfront in order to get around this. But many people want to only make a down payment upfront, or they may even be looking for companies that will accept payment at the completion of the job. Always demanding payment at the beginning can make it hard to find work, and contractors have to compromise and take risks.
In other words, there could be a scenario in which you have finished the job and you still haven’t been paid. How long is it going to take for this money to come in?
It’s an average of 83 days
If you thought it was going to be fast, you’ll probably be surprised to find out that the average sits at about 83 days, according to some reports. Plus, since this is an average, it suggests that a lot of contractors have to wait far longer. This could mean that getting paid in three months would be a positive outcome, and you may be waiting for four months or more.
Such a delay can create all sorts of issues for your business if it happens. You are dependent on cash flow. You need to be paid from previous jobs so that you can invest the money in workers, materials and everything else that you need to take on future jobs. When one customer doesn’t pay, it can impact your bottom line in more ways than one.
As a result, if you have been having trouble getting customers to pay promptly, it may help to look into all of the legal options that you have.