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PLUMBING CONNECTION
SPRING 2015
RECOVERING DEBTS
IT’S NOT THAT HARD TO CUT OUT 80% OF YOUR BAD PAYERS.
ANTHONY IGRA
TALKS ABOUT THE
SYSTEMS NEEDED TO ENSURE YOU GET PAID.
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. 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
have been 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 a 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 the $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 documentation. The
most common question I get asked after a claim is, ‘How do 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 3.5 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 of paperwork 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 pictures with it
COVER STORY:
DEBT RECOVERY