Money makes the world go ‘round, and that absolutely holds true on a construction site. Consistent cash flow is what keeps your projects running smoothly and on time. It also leads to satisfied customers and growth for your company. If you’re trying to improve your company’s cash flow, use these five cash flow tips for contractors.
The Devil is In the Details
Optimizing contractor cash flow starts with the details of your initial contract with the customer. When you develop your terms of payment, be sure that they include details and a payment schedule that is beneficial to your company. For example, outline that payments for materials and supplies are due upon delivery to the project site rather than once the project is fully completed.
Go After Those Payments
A great way to improve contractor cash flow is by tracking down payment when it’s due. Be proactive with clients and set a strict payment deadline of 40 days or fewer. It also helps to keep your paperwork in order so that everything can be signed off on quickly and won’t create a delay in payment.
Now comes the part that a lot of people struggle with. Ask for payment for any work that has not only been completed, but inspected as well. If it’s the finished product, you have every right to request timely payment from clients.
Cash In On Change Orders
You want to be flexible and accommodate clients, but the added expense for change orders can have a negative impact on contractor cash flow. If you don’t keep track of the changes and bill appropriately, your company will take a loss. Don’t find yourself questioning if you should or shouldn’t charge for a change. Instead, set clear expectations regarding payment for changes made during the project. Be thorough with your record keeping so that every eligible item is billed for and payment is collected.
Accept Online Payments
It’s 2021, so if your company isn’t already accepting payment online, it’s time to get with the times. This provides customers with not only an easier way to pay, but it also ensures the money gets into your account faster. This will grow your cash flow and your business, and it will free up funds for daily operations and payroll.
Financing Through HFS Financial
One of the best ways to increase contractor cash flow is to offer financing for your customers. The easiest way to do this is by partnering with HFS Financial and leaving financing to the professionals. Our team at HFS Financial has years of experience in home improvement financing. Regardless of the type of project, from an addition to their home or a new pool loan, our experts will walk your clients through the process. HFS Financial will connect them with the best contractor financing option for their home improvement project. It’s easy for them to get started, too. All they need to do is completed a 60-second loan application. Give us a call at 1-800-254-9560 for more information. “You Dream It, We Finance It.”