Tom Mitchell, owner of Mitchell Construction in Medfield, Mass., clearly communicates payment schedules to his clients and asks his project managers to collect the money.
“A big part of this is expectations and understandings,” Mitchell says. “You need to clearly define this for clients who have not remodeled before.”
When he reviews the contract with clients, Mitchell explains the payment schedule, which is tied to significant milestones such as the start of drywall, plumbing, or tile work. Mitchell gives clients a job schedule that has the approximate dates of the payments.
He also takes this time to explain the change order process and payments. “We ask them to sign a change order and we collect payment before work begins,” he says.
Project managers are trained in the company's collection process. During the remodel, the project manager alerts the accounting department a few days before the next phase of the job begins.
The department prepares an invoice that the project manager picks up and delivers to the client. The project manager takes the payment back to the accounting department so there is no confusion about applying the money to the correct project. The accounting department informs Mitchell or the production manager if a payment has not been collected, and they deal with any discrepancies. “If anyone has to fight for money,” Mitchell says, “it should not be someone who is on the job every day.”