Construction Contract Payment Schedule

Saturday, November 19th 2022. | Sample

Construction Contract Payment Schedule – The nature of construction often means that subcontractors spend money on materials and equipment while the project is underway. They often wait for their next paycheck to cover these expenses and balance their finances. Often, subcontractors have no hope of making a profit until the final payment is made. As a general contractor, slow or partial payments to subcontractors can negatively affect your business relationship and reputation. Implementing a construction payment plan to pay your subcontractors on time and without conflicts will help foster these relationships and keep project productivity and workflow high. In this blog, we will discuss construction payment schedules, how to create them, and what they should contain. We’ve also created a free downloadable construction payment plan template that you can use in your day-to-day operations, or as a guide for creating your own custom payment plans. What is the construction payment schedule? A construction payment schedule is a formal document—often in the form of an Excel spreadsheet—that allows accountants to plan, organize, and schedule subcontractor payments. They are suitable for construction projects of any size and should be used when implementing a progress payment method for paying subcontractors. Billing methods and payment schedules should be added to each construction contract before the project begins. Payment schedules ensure subcontractors receive payment when work is completed and keep payments consistent so suppliers can pay as the project progresses. They can even help construction projects be completed on time, within budget, and without financial problems. Request a demo today to see how ® construction fleet management software can help you get paid faster with instant digital invoicing and more. How to Create a Construction Payment Schedule A construction payment schedule can be created as a Word document or an Excel spreadsheet. The choice between Word or Excel depends on your accountant, but we recommend creating an Excel spreadsheet for your payment plan and we’ll cover this approach in this blog. Details, information, and organization are important when creating construction payment plans in Excel. Make sure everyone in your accounting department has access to these files, and make sure they are backed up securely to avoid conflicts. What should be included in the construction payment plan? At a minimum, the construction payment schedule should include details of the subcontractor, services performed, payment amounts, and payment dates. In order to create a complete and detailed payment schedule, we have outlined below exactly what to include. The Construction Payment Schedule must include: Subcontractor Information Services Amount of Payments Made Total Payment Date Due Actual Date of Payment Payment Method Date Subcontractor Part Description The first thing to include in the construction payment schedule is who is paid. This includes the subcontractor’s first name, last name and title. Your accounting team may want to include other identifying information such as subcontractor addresses, contact information, account numbers, etc. Services Performed Subcontractors may perform one task on a construction project, while others may perform multiple tasks. Including detailed records of services (or packages of services) performed in your payment schedule will ensure that subcontractors are paid for the work they do. Including such information in your payment schedule can also serve as a document to help you refer to when reviewing previous work and payments, as well as help resolve disputes. Your team may also find it beneficial to include due dates for each task in the payment plan to be paid. Billing Amount In a column next to the services performed, preferably include a column listing the cost of each service. In other words, this represents the amount paid for each service. Since this is a payment schedule, it is also a good idea to include the percentage that each service represents in the total total payment. This section may also include any deductions or exclusions related to the contract or subcontractor. Total Amount Paid In the column next to Amount Paid, it is a good idea to include a column specifying the actual amount paid to the subcontractor. The amount charged may not be the amount received. That’s why it’s important to write things like deductions and balances so that everyone who looks at these documents can understand the differences. Listing the total price paid is also a way for your business to keep its books organized and error-free. Payment Due Dates Be sure to include payment dates in your construction payment schedule. Knowing when subcontractor payments are due will keep your payment schedules running smoothly and on time. Actual Payment Date In some cases, payments may be made before or after the due date, which needs to be written down so that your records are completely accurate. This may be due to statistical holidays, delays in work or invoices, or other unforeseen reasons. Payment methods When working with different contractors, there may be different payment methods. Some contractors will be paid by check, others by direct deposit, etc. Your payment schedule should document this information to ensure complete transparency of the transaction. Notes Section It is important to include additional information and a notes section in the payment schedule. This is a good place to record details if there was a payment amount or date difference and why. Construction Payment Plan Template We’ve put together a free construction payment plan template that’s easy to download. It includes everything we listed above as requirements and can be easily integrated into the practice of your payment plan. Download our free construction payment schedule template to speed up payments and eliminate disputes. An up-to-date and organized construction payment schedule is essential to run a smooth payment process. Streamline your existing payment process with paperless fleet management software that speeds up payments and eliminates financial hassles. Our electronic ticketing and paperless timesheet solutions move these types of financial documents online, making the payment process easier and faster for your accounting department. For example, through the platform, you can clearly see information such as logging in and out, loading and unloading, and waiting data. Work orders and time sheets generated on the site are uploaded to the platform in real time as soon as they are cleared. Your bookkeepers can see proof of work instantly so payments can be processed quickly. Going paperless also means no more lost or illegible tickets and schedules that were causing delays and discrepancies. It also provides a reliable source of truth for financial documents for all parties to access, further eliminating financial disputes. Our free e-book How to Get Paid Fast and Eliminate Disputes covers best practices for billing and payments. Download the eBook or request a demo to learn how our software can help improve your construction payment schedule and more.

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Construction Contract Payment Schedule

Construction Contract Payment Schedule

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Construction Contract Payment Schedule

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Construction Contract Payment Schedule

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Construction Contract Payment Schedule

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Construction Contract Payment Schedule

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