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E LE CT R I C AL CONNE CT I ON
S P R I NG 2 01 5
BUSINESS BASICS
Getting paid without the hassle
I
know a contractor who was asked to
do so much additional work that the
value of the variations exceeded the
original contract price. When it came to
payment time the client flat-out refused
to pay any of the variations at all. It was
then that the contractor produced every
single variation request, where the work
was detailed, numbered and signed off by
the client’s foreman. The client was furious
and grudgingly paid the whole amount,
clearly realising that the weight of evidence
was on the contractor’s side: it would be
pointless to dispute it.
Another contractor had his client claim
that he never gave any instructions to carry
out some part of the work. The contractor
produced emails showing where the
direction was given.
I know another who was accused of
providing damaged product. But this
contractor was able to produce photos of
the product when it was delivered and the
signed receipt from the site representative.
It was in perfect condition, clearly proving
that the damage occurred after delivery.
The matter went to adjudication and the
contractor’s evidence was so conclusive
that the client realised that payment was
the only option. A cheque for $60,000
came the next week.
These are just a few of examples of how
paperwork gets you paid. Some people only
associate paperwork with delays, red tape
and wasted time. Chances are those same
people are locked in payment disputes over
what was promised, agreed or quoted and
are unable to prove their case.
The fact is that solid paperwork is probably
the most effective weapon in defending a
payment claim. Good paperwork means that
there isn’t this great void where neither you
nor your client can prove what was promised,
agreed or quoted.
But most contractors struggle to get
themselves and their businesses organised
around simple and solid processes to
tighten up on payment. The most common
question I get asked after a claim is ‘How to
I stop this from happening again?’
So I put together everything I had learned
from a decade of payment disputes and
created Payment Mastery. It provides three-
and-a-half hours of content to answer that
very question: How can a contractor tighten
up on payment practices and avoid 80% of
payment problems?
Let’s look at what this is in more detail.
PAPERWORK IS
CONTEMPORANEOUS EVIDENCE
The important feature about
paperwork that is created or completed
around a dispute is that it becomes
‘contemporaneous’ evidence; coming
from the word ‘contemporary’. Good
contemporaneous evidence will carry
significant weight in proving what
happened, what was promised, agreed or
quoted. In adjudication, the adjudicator will
place weight on this kind of evidence in
making a decision if he/she is satisfied as to
its quality and credibility.
Far too many disputes come down to the
contractor’s word against the client’s. The
easy way to tip the balance in your favour is
by including simple record-keeping habits
into your work.
In the Documentation Video in Payment
Mastery, we go into detail about how you
can not only create this kind of evidence
but also how you create ‘corroborating
evidence’; documentation that backs up
other documents. For example a Site Diary
Note might back up an email sent that day
on the same issue. Payment mastery also
provides 12 complete document template
downloads for you to use straight away in
your business.
VARIATION MANAGEMENT
>
Variations/Site instructions (Time
required: 30-60 seconds)
If you are given a verbal direction to
carry out additional work make sure it
ends up in written form. If the client refuses
to document the direction, then the
contractor should document it in his
own ‘site instruction’ form and issue it to
the client.
I recently prepared an adjudication
application where there were nearly 60
directions for additional work. Even though
the client’s foreman failed to complete a
variation advice as required by the contract,
the contractor documented each one
himself on his own paperwork: The details
of the work done, who requested it and
dates and times were all recorded. The
result was that he was awarded all these
variations because the adjudicator was
satisfied that these site instructions were
valid contemporaneous evidence that work
was requested and done.
The hot issue of variations actually has its
own dedicated video in Payment Mastery.
In that we go into variation registers, how
to complete them and how to incorporate
the register into your payment claims. More
importantly though, it covers the three
crucial aspects of variations that need to be
recorded on any variation approval: scope,
price and authorisation.
>
Photos/reports (Time required: 30-60
seconds)
Stop talking on your mobile! Take
It’s not that hard to cut out
80% of your bad payers, writes
Anthony Igra
. Here’s how.