Why Project Documentation and Cash Flow are Essential for Construction Companies Right Now

Our current COVID-19 landscape is unpredictable, and businesses across all industries are finding themselves affected as this pandemic runs its course. In the construction industry specifically, companies need to be thinking about managing timelines and documentation while projects are delayed or shut down.

Take Disney, for example. After the announcement of its parks closing, Disney announced it was halting all construction work as well, and many major companies are following suit. With the inevitable productivity slowdown companies are bound to face, there are going to be cash flow concerns to manage. 

General contractors need to look at the potential impact to their businesses during a shutdown. Having all important information organized will be key over the next few weeks while companies navigate this unchartered territory. Along with documentation management, now more than ever, protecting your cash flow is vital – and using a cloud-based construction software will help you to maintain the health of the business remotely.


With jobsites temporarily closing, concerns among contractors will begin to shift towards detailed management to documentation. While there will be immediate documentation concerns, it is also important to use this time to take a step back, re-evaluate current workflows and determine if there are opportunities for optimization once jobsites begin to reopen.

Do you need to renew notices?

The biggest initial concern might be whether or not existing notices are set to expire and if you need to renew. It is possible these project delays end up exceeding 45 days, in which case, GCs will have some important decisions to make. To manage these timelines, you will need to start looking at this documentation immediately. Having a cloud-based system during this time of remote work can help you easily manage the critical documentation needs that have been brought on by the crisis.

How can you use this downtime to optimize workflows?

First, consider risk management. Look back at conflicts that occurred over the last six months, and search for trends within the causes of disputes. Did you have the information you needed to defend your position? When managing a dispute, knowing whether a document was sent, viewed or agreed upon is generally the crux of a defense or offense. During project delays or downtime, you can search for commonalities within the workflows surrounding disputes, and those findings can help mitigate risk once the industry enters a ramp-up period.

Now is also a good time to analyze workflows relating to time management and find opportunities for optimization. Try to quantify the time your employees invested in each type of documentation, assigning dollar amounts where applicable. Consider analyzing processes around subcontractor invoice management as well. Knowing how taxing and costly this process can be, assess the steps needed to manage vendor invoices and determine how related workflows can be streamlined.

How can you use this time to get organized?

Whoever has the most documentation is going to benefit the most when all of this is over. In the end, lawsuits and litigation will be unavoidable – knowing what your contracts say is important, but having organized documentation on the status of the project (photos, purchase orders, who has been paid for what, etc.) will be crucial to have organized and on-hand in the event of legal issues. 

GCs need to ensure this information is correct and readily available. With many people currently scattered in different places, uploading to the cloud opens up access and will be essential for making sure the project is paused or continues accordingly.

Construction Cash Flow

Aside from documentation management, general contractors need to be paying close attention to their construction cash flow to help stay afloat in a time of uncertainty. Construction software platforms, like RedTeam, have integrated with construction payment SaaS platforms, like Levelset, to help save time generating, tracking and collecting lien waivers and other important payment documentation. 

Supply chain delays, quarantine impacts and of course, the wider economic impact all affect business within the construction industry, which can ultimately affect company cash flow. The following tips can help construction companies mitigate risk and continue to survive through the downturn of the economy.

1. Accommodate priority and legal issues

Negative impacts are bound to hit over the next few weeks. Seek a construction attorney and help mitigate any additional risks that may pop up to avoid stress down the road.

2. Monitor Liens

On all job sites, contractors should be sending a preliminary notice to protect themselves against payment problems and pulling the trigger when payment is dragging on jobs. By raising awareness to the matter, a notice of intent to lien or filing a mechanics lien will help in protecting your rights. Proper documentation makes an attorney’s job defending a contractor much easier.

3. Find Access to Cash

Cash access amid an economic downturn is very important at this time. With the potential of cash drying up all around, GCs should work quickly and efficiently to obtain a cash cushion. Working capital loans, buying materials with longer terms, getting cash from slow-paying accounts and keeping an eye out for SBA loans are actions that can help cash flow.

While the Coronavirus leaves the construction industry with an unpredictable future, it is a good time for construction companies to get caught up on documentation management and re-evaluating their workflows. With the help of construction software integration, companies have a tool for seamless organization, communication and documentation for all aspects of a project. By buckling down now, you have a better chance of coming out strong and ready to resume on projects once this passes over.

About the Authors:

Frédéric Guitton is Chief Strategy Officer/CMO at RedTeam Software. Frédéric’s role is to directly influence the rapid expansion of the company by strategically expanding its reach through a well-defined company culture, strategy and marketing. Frédéric works closely with financial and strategic partners, identifying new partners, providing an excellent experience and great support to existing clients.

Justin Gitelman is Content Partnerships Coordinator at Levelset. Justin empowers contractors to always get what they earn by distributing helpful content and integrating partner perspectives to complement each other. Levelset helps by making payment paperwork and compliance easier, getting cash faster, monitoring the risk on jobs and contractors, and better understanding payment processes and rules. 


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