Requesting, collecting, and tracking lien waiversHow GCs Can Manage Lien Waivers Better Using Technology

Office managers, accounting managers, and others hard at work “back at the office” for construction companies have many different tasks and responsibilities they have to manage.

In addition to just keeping the company running on a day-to-day basis, many have to manage the finances of the company too, handling both the money coming in (payments, collections, and receivables) as well as the money going out (expenses, overhead, and especially, payments to subs and other vendors).

Since we’re talking about the construction industry, that means there’s a ton of  paper – the literal documents –  that goes along with managing this money. These documents include incoming notices and invoices / pay apps, outgoing payments, and the exchanging of lien waivers.

It’s no surprise then, that many construction companies (but especially general contractors) find that requesting, collecting, and tracking lien waivers can be a headache. Technology can help this process become less manual and ensure that all parties are paid fairly while avoiding double payment on a project.

Read on as we explore this further and offer 4 tips on how to use technology to make managing all of this paper (but especially lien waivers) easier and more efficient.

The 4 Tips

1) Go Digital

Over the last several years, project management in the construction industry has become increasingly digitized. While this started with bid documents, drawings, as well as other documents generally used in the field, this trend is making its way to the documents used in the payment process.

Because lien waivers must be exchanged, going digital has the potential to provide huge benefits in efficiency, accuracy, and speed. This is a simple calculation – it’s much easier – and faster –  to email something than it is to send it by snail mail.

Electronic signatures cut down on the time it takes to print out a hard copy, sign it, then scan it and send it back. And it is much easier to track digital documents and keep them organized compared to paper hard copies (more on tracking in #4 below).


Essential Reading

Can You Use Electronic Signatures on Lien Waivers?


2) Ask Your Subs to Include Conditional Waivers with Every Invoice/Pay App They Send

This is a simple tip that is easy to put into practice and it saves a ton of time. It’s silly for your customer to send an invoice, wait for you to receive it, then wait some more for you to request a lien waiver, when they could just send them both at the same time. Ask your subs to do this, and especially, to do it electronically.

And for the subs reading this, don’t wait for the GC to request a lien waiver from you. Go ahead and proactively send a conditional lien waiver with every invoice / pay app, and let them know you’re doing this. Cutting down the time spent waiting for waivers to be exchanged can dramatically speed up the time it takes to get paid.

3) Track the Waiver Status

By utilizing technology to track lien waiver statuses, the people in the office managing this process can automate a lot of the processes and eliminate the guesswork in the waiver exchange process. This process can work for both lower-tiered parties as well as those parties that may be managing the project. Additionally, a solution that tells the status of a waiver can help prioritize who accounts payable department should pay first.


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4) Designate a Waiver Expert in Your Office

Even though a construction company may implement software to reduce some manual effort, it’s a good idea to designate a specific user to take ownership of the lien waiver process and understand the technology behind exchanging lien waivers electronically.

In smaller offices, this might be an office manager, while in larger offices, it might be the responsibility of someone in the accounting department. Either way, by training a particular person on the process, a company can ensure expertise and success when dealing with other parties on a project.


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4 Tips on Requesting, Collecting, and Tracking Lien Waivers
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4 Tips on Requesting, Collecting, and Tracking Lien Waivers
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Exchanging lien waivers can be a headache for construction companies | This article presents 4 tips to use technology to help manage the lien waiver process
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zlien
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