In the first part of our cash management series, we focused on how effective financial planning starts at the Pre-Bid and Bid phase. Today, we discuss the Contract Award Phase and the key areas of a contract that may adversely impact cash management further down the line.
TIP: Once a contract is awarded, a construction company should perform a more intensive review of the contract and engage in negotiations to obtain more favorable terms that facilitate desired cash flows.
Contract provisions to consider include:
It is up to you to ensure that your contract’s language won’t hamstring your efforts to collect payment and keep cash flowing through your project. Don’t get caught out by blindly accepting contract terms without negotiation.
Stay tuned to the Aronson Construction Report to read the rest of our five-part series on cash management. For more information on how you can improve your company’s chances for success, contact Michael Corcoran of Aronson’s Construction Industry Services Group at 301.231.6200.
Construction Cash Management Series: Part One – Pre-Bid and Bid