The Perfect Storm - A Survival Guide To Disputes

Many of the contractors I meet, primarily during a dispute, have one thing in common. They have usually been too lenient with clients and not been completely focused on their cash flow.

As the economy……..thinking of a positive word here……imploded, cash became a scarce commodity and as it continued to dry up many companies fell victim and still are, to what I term "The Perfect Storm".

The Perfect Storm is a set of events or circumstances that happens only once in a company's existence, sadly it is the last thing to happen to the company in question.
So what are these events or circumstances and how do you avoid them? Regardless of a company's size they have one basic need, cash flow.

Most contractors I see pay little heed when a client pays them less than they are due, usually "on account", with empty promises to "sort it out next month" only for the same to occur the next month and so on. When they approach final account stages the values suddenly drop off even more and in some cases stop altogether.

Now imagine this were to happen not on just one job, but several jobs all at the same time. Add to this outgoings, wages, VAT, Tax, suppliers and so on…you know the script.

For many companies all it takes is for one large client or project to begin delaying, disputing or just not paying you for your cash flow to become irreversibly doomed.

So how do you avoid the Perfect Storm, how can you navigate to safe water and ensure your cash flow stays within safe or manageable limits?

As I have said the events or circumstances revolve around a companies cash position and its ability to weather the storm as it were. By following these simple steps you can avoid the storm.

1. When submitting interim valuations only claim what you are entitled to and not a penny more. 
2. At the end of the next month if you are not paid what you are entitled to or nothing at all ask, in writing for their reasons. 
3. If you are ignored then the other side is breaking the law and you now have two options
   1. You notify your intention to suspend performance in writing
   2. You employ a Third Party to resolve the situation using a suitable ADR technique

I am simplifying here as dependent on what the contract says (I hope you read it before signing) there may be potential issues. Either way you do have legal rights and its down to you to exercise them correctly by getting the right advice.

I have a simple statement - NEVER LET A DISPUTE EXTEND TO MONTH 3.

I am sure you have been in the position all through a contract where you are paid more or less and sometimes even to the penny what you are expecting without any substantiating paperwork? Do not accept this, as the contract progresses this situation will change.

If you wish to avoid the Perfect Storm or think you may be in its path please call me for a no obligation chat and lets get you back on an even keel.

Apologies if I went "overboard" with the nautical terminology………….