Avoid anxiety, arguing and aggravation....
It is almost a year since we added the last lick of paint to our home renovation project.
We agreed amicably with one of our trades not to pay the outstanding balance for their original works until a little 'niggle' was sorted out (not their fault) and in the meantime instructed a couple of small additional items.
What follows is a cautionary tale illustrating a fundamental issue when running your own project!:
The 'niggle' was resolved, although some time passed as we had to investigate several options to get to the bottom of the issue, again no fault of the trade. With all their work finished we asked for the final bill, expecting to owe in the region of £700.
I opened my emails to find an invoice for not £700.00 but a staggering
Unfortunately I was out when I picked up the email and not able to check my records. I carried the panic around for a few hours and as soon as I got home rushed to check it out.
From the beginning of the project I had asked each trade to sign for every cheque they picked up from us. Each payment was logged as a list on one piece of paper per trade. It was then filed along with their invoices and original quotes.
Originally this documentation was drawn up to help me keep a keen eye on outgoing payments and cross reference it with the quotes and invoices before feeding it into the spreadsheet for the whole project.
I was able to produce proof of payment quickly. It demonstrated that the payments they believed to be outstanding had in fact been paid. I had dates, sums of payment and their signatures alongside the receipt of payment to prove it. With the wonders of modern technology I took a picture of the document and texted it to them.
I am one of many, many clients they have looked after over the past couple of years. They were completely genuine in their mistake but before I showed them the proof they were also adamant that I had not made the payments and the large sum was still outstanding. I had begun to question myself until I saw the proof as with so many trades and payments I could not remember exactly how much we had paid either.
This issue could have ruined the great relationship we have had for many years now, over many projects. It goes to show that without a paper trail you can have two sides who genuinely believe themselves to be in the right. We are human and we forget things! In such instances tempers can fray quickly and relationships quickly disintegrate even ending up in court.
As the professional, honest trades they are they were happy to accept their mistake and agree that they had mislayed some of their paperwork, or forgotten to log payment as it had been some time since the start of the project. An honest mistake; I know that with no records I would have struggled to remember what we had paid them over the course of a year and a half.
So, what could have turned into a serious issue was sorted out in minutes thanks to record keeping. Following this situation I cannot stress enough how recording payments and getting your trades to sign for each payment is important it is for balancing your spreadsheets, keeping track of money going out and vital as your proof of payment.
Top Tips to Prove Payment and Preserve Peace!
1. Do not rely on your trades to remember what you have paid them. It is your money so make it your responsibility to cover your own back and keep a note of payments!
2. Do not rely on your own memory. Even if you only have one trade, over a number of payments you will probably forget how much and when you have made them.
3. Try to use the same cheque book or bank account for paying project bills as it makes it easier to track when something goes wrong.
4. If you are managing trades yourself, create a central file for paperwork (I had a concertina one for easy filing) for easy reference and a day to day use.
5. File all paperwork immediately including copies of each quote and invoice given, whether you take them up on all of them it or not. Also include copies of any email correspondence as emails can get deleted!
6. Create your own system for recording each payment. Each time you hand over payment record the amount, date and get your trade to sign to say it has been received.
7. Stick to your system. It will fail if you are not disciplined about recording each payment. File it immediately and don't leave until later as you might forget or lose valuable paperwork.
7. If you pay by direct debit print out the payment information and add to your documentation. That way you have an immediate and accurate list of all payments paid out. When tallying payments at a later date you might forget about any additional transfer payments.
8. Before you make payments double check and cross reference invoices to make sure things are not paid for twice (it happened to us with something being added on two separate invoices!). This also allows you to have an ongoing tally of what you have paid to date.
I hope this post has been of use! Please share it with your friends on Facebook or Twitter - you never know when they might need to heed our cautionary tale!
As ever, please let me have any feedback, comments or email me at : firstname.lastname@example.org. All images courtesy of Google.