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We are a GC and have put ourselves in bit of a quandy that occured while changing accounting programs. A large invoice from our plumber was lost during the transition. That bill has since been paid but the result has put us at a point of not having enough capital to pay our subs on another job. Does anyone have recomenddations as to how to get the capital or a process as to go about to inform subs of current situation. We have never had a problem like this and have always had good relationships with all subs as we pay promptly for their services. Any advise would be greatly apriciated.
 

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Sounds like a case of poor cash flow. This has happened before and we learned our lesson fast. We payed the subs in full out of our pockets, after all we did hire them to complete a certain task and they held up their end of the deal.

My suggestion: suck it up and write the checks even if you need personal funds or a loan to cover it.

We have used the same subs time and time again, they know the money will always be there no matter what issues we may have within the company. If we asked them to hang on for a week I am sure they would but I would not blame them for saying no. How would you feel if the owner of the project said "I will pay you just not right now" would you go back for more work with that owner?


So it comes down to this:
1. Punish the subs for your lack of money management skills.
or
2. Stay true to your word and contact and find a way to pay them no matter how much of a pinch it puts you in.
 

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Sounds like a case of poor cash flow. This has happened before and we learned our lesson fast. We payed the subs in full out of our pockets, after all we did hire them to complete a certain task and they held up their end of the deal.

My suggestion: suck it up and write the checks even if you need personal funds or a loan to cover it.

We have used the same subs time and time again, they know the money will always be there no matter what issues we may have within the company. If we asked them to hang on for a week I am sure they would but I would not blame them for saying no. How would you feel if the owner of the project said "I will pay you just not right now" would you go back for more work with that owner?


So it comes down to this:
1. Punish the subs for your lack of money management skills.
or
2. Stay true to your word and contact and find a way to pay them no matter how much of a pinch it puts you in.
Ya Buddy!:thumbsup:
 

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I suggest you get to the bank and explain to your banker that you need his services and borrow the money to pay your subs unless you had previously agreed upon some type of provisions for this type of event.

The character of a person is revealed in difficulty.
 

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Originally Posted by Kbolz:
We are a GC and have put ourselves in bit of a quandy that occured while changing accounting programs. A large invoice from our plumber was lost during the transition. That bill has since been paid but the result has put us at a point of not having enough capital to pay our subs on another job.
As HSConstruction suggested, it sounds like poor cash flow management. If you had budgeted for the plumber’s costs, then the funds should have been sitting in your bank account even if the misplaced invoice went unpaid until the plumber sent you a 2nd Notice.

Or do you mean that you paid the invoice but your proof of payment is what was lost during the accounting program switch-over? Because you can’t prove you paid the original invoice, you now find yourself in the position where you have to pay it a second time and that is what is making you short on funds. Is this what happened? If so, then there is a possibility that you may be able to claim it on your business insurance policy.

There are three different wordings that could possibly apply. Look for the following:

- Accounts Receivable Coverage: Most claims are of the Accounts Receivable type where your records of outstanding invoices are destroyed and now you don’t know which of your customers to chase after for unpaid invoices or how much they still owe you. (And if you ask them, odds are most will say they were paid up in full - LOL.) Sometimes the Accounts Receivable form is broadened to also include Accounts Payable records, which can then cover your situation.

- Computer Breakdown Extension: This form includes coverage if there is software failure that results in erasure of data.

- Multi-Peril Extension Form: Maybe you don’t see either of the above two Covers on the front page summary of your policy. Don’t give up yet. Look for a Multi-Peril Extension Form line on that front page and then somewhere in the bulk of paper that makes up your insurance policy will be a list of extensions or “frills” at nominal automatic limits. The insurance company might have “thrown in” these extensions as part of a package policy.

Even if you find these coverages on your policy document, the wordings will have to be read very carefully to confirm if you have a reportable claim or not. Your agent/broker can help. By the way, if they just brush you off and say “that’s not covered”, push a bit harder and make sure they actually read the fine print and prove it to you one way or the other. It might be worth taking the time to investigate as it sounds like you are in quite a pickle right now.
 

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I still can't see why paying a legitimate invoice all of a sudden put you in this situation...did you go out and buy a big boat with the money left over in your account after you "lost" the plumbing invoice? :blink:

If you have such a large plumbing invoice that paying it makes you unable to pay multiple other subs, I'm guessing you have some accounting and job costing software, and project manager(s) to handle this stuff....plus, wasn't the plumbing co. looking for their money??

Just doesn't make sense. :no:
 

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I think the lack of sympathy has pushed him away.

I still do not understand how an accounting software issue put them in a pinch. Your bank acct does not care what the software says.

Most likely the funds of current job were spent paying off a previous one. I don't know about the rest of you but even without accting software I know who will be looking for money and where I have it. Maybe a large purchase with misapplied "profits" could be the culprit.
 

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as a sub,my help wont care if you missed an invoice or not.i would agree that you should go to the bank and secure the money needed to get you thru this spot.i expect to be paid when i am finished with a job,unless other arrangements
have been made.and as a GC you have an obligation to pay those subs,as your agreements with them state.
i wish you luck,but buck up and write those checks.
 

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Last night I got into the sauce a bit too much and ended up eating enough food for two nights. Now I realize that I don't have anything for dinner this evening.

I'm sure one of you guys has been in this mess before at least once. Let me know what to do.
 

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Last night I got into the sauce a bit too much and ended up eating enough food for two nights. Now I realize that I don't have anything for dinner this evening.

I'm sure one of you guys has been in this mess before at least once. Let me know what to do.

you could just take a trip to the....wafflehouse!!!:clap:
 
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