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The Dotted Line: How contractors ensure the project owner can pay

September 24, 2019

Contractors know that prompt payment of their pay applications is critical to a construction project’s success. Timely and accurate payments allow them to pay their employees, lower-tier contractors, material suppliers and other vendors as agreed, which not only helps make sure there are no disruptions to the project schedule, but builds loyalty. High-demand specialty contractors, for example, choose to work on projects that pay on time and avoid ones that don’t.

Sometimes late payments from the owner are procedural in nature — perhaps staff members that handle pay applications are inundated with work and just have trouble getting organized enough to process the paperwork on time.

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