Suppose a given contractor is responsive to your needs, does good work, completes the work on time, has solid safety practices, and never leaves a mess. Additionally, the personnel sent to your site are professional and courteous. You probably want to keep that contractor, right?
But your company is chronically late in paying that contractor. The resulting cash flow problems cause the contractor to reduce its exposure to your company. They are slower to return your calls and they’ve started telling you they are booked. Are they just busy or are they frustrated with your company’s accounts payable department?
Don’t count on your contractor’s technical contact to tell your company’s technical contact (you) about payment problems. Prevent problems from occurring. Check with your Accounts Payable department to find out what issues can cause payment delays.
For example, A/P may need to match an invoice with a payment authorization such as a purchase order. If you haven’t provided the authorization ahead of the invoice, then someone in AP has to pull the invoice out of the workflow stream to take care of that. Also see if there is a preferred invoicing method (e.g., electronic instead of paper).
