We all have to deal with the contractors one time or the other in our lives. We designate our home projects to them and depending on their nature, the payments are decided. If deciding contractor pay has baffled you often, here are a few tips to determine a payment method and process with your contractor.
How to develop contractor’s payment schedules
1.Before the job starts, make a written document that clearly specifies when the payment to the contractor will be made at different stages of your project. This becomes more important when the job is long and time taking. The payment schedule may simply mention the amount of payment and dates and when it will made totally at the completion of the job. You can follow this model that is practiced largely – 10% at the time of signing the contract; 25% payments in three installments during the project’s duration and the last 15% payment when the job is completed.
2. Do not make a large advanced payment to the contractor. There is high risk involved because the contractor may either delay work or doesn’t provide you quality.
3. Always be sure about the financial standing of the contractor and his reputation in the market. You should see the sample of his work before finalizing the agreement with him.
4. Other than deciding payment dates, it is important to make sure that the job milestones are specified too. For instance, till January 26, plumbing should be completed or till February 1, all electrical work should be done.
5. Use contractor calculator to accurately calculate how much you need to pay. Using contractor calculator helps you in handling your finances.
6. It is recommended to pay the contractor through bank cheque, so that the payments can be well documented. If you choose to pay by cash always get his sign on the document.
7. Never make contractor pay in total till you are completely satisfied. Otherwise, later, it will be difficult for you to get the work done as per your wishes.