Introduction:
Managing subcontractor claims effectively is essential for successful project management and maintaining strong business relationships. In this blog post, we share ten tried-and-tested tips to help you manage subcontractor claims more efficiently and avoid potential disputes.
Stay Organised and Consistent
Develop a consistent system for managing subcontractor claims and stick to it throughout the project. Keeping your records organised and up to date can save you time and effort in the long run, and help you avoid potential disputes with subcontractors.
Utilise Excel for Claim Management
Unless you have a system in place already MS Excel offers many features that can help you organise and manage subcontractor claims, such as Tables. Tables provide a structured way to organise and analyse data, which Google Sheets lacks. Excel's advanced functions can also help you automate calculations and streamline your claim management process.
Rethink Retention Strategy
Understand and Adhere to Security of Payment (SOP) legislation
In most parts of Australia, you need to respond to subcontractor claims within 10 days or be liable for its payment. Familiarise yourself with the Standard Operating Procedures (SOPs) and ensure that you comply with the required response timeframes.
Work Excluding GST
To simplify calculations and reduce potential errors, manage subcontractor claims and costs excluding GST. Only add GST when issuing an invoice or making a payment.
Maintain Separate Columns for Quotes and Invoices
Create separate columns for quotes and invoices to easily track and analyse each item. This structure allows you to quickly calculate totals and compare the quoted and invoiced amounts for each claim.
Consult and cross check with Your Bookkeeper or Accountant
Ask your bookkeeper or accountant for assistance in managing subcontractor claims. They can help you review invoices, compare them against accounting reports, and ensure that you have captured all relevant information.
Handle Variations Effectively
If a variation has been submitted as an invoice but not quoted, enter the amount in both the quote and invoice columns. This approach ensures that you account for the variation in both your budget and actual expenses.
Communicate with Subcontractors
Share relevant claim information with your subcontractors to ensure that both parties are on the same page. Regular communication - such as an email with a screenshot of their specific assessment page can help prevent misunderstandings and ensure that all parties are aware of the project's financial status.
Request a Statement from Subcontractors
Ask subcontractors to provide a statement for the project to validate that no claims have been missed. Comparing your records with the subcontractor's statement can help identify discrepancies and ensure that all claims are accounted for.
By following these tips and tricks, you can effectively manage subcontractor claims, maintain positive working relationships with your subcontractors, and ultimately contribute to the successful completion of your projects.
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