What goes on the lien waiver, and who sends it
The waiver amount, the check and the pay application should agree, and in most companies three different people touch them.
The wording, the form and the conditional or unconditional choice vary by state and by contract, so the form itself is a question for an attorney or a lien service. The ownership is simpler. The accounting team sends lien waivers with the pay application and collects waivers from the subs when they are paid. Retention on a sub follows pay when paid and gets tracked on the sub's pay application, so the figures come from one document everyone can see. National Lien Services handles waiver management for subcontractors.
Three moves, in order
Step 08: Standards and accountability
Five hours a month of owner time, spent projecting the work.
Other problems step 08 solves
Other things that go wrong
What owners ask
What amount goes on the lien release after a discount?
The waiver amount, the check and the pay application should agree, and in most companies three different people touch them. The wording, the form and the conditional or unconditional choice vary by state and by contract, so the form itself is a question for an attorney or a lien service. The ownership is simpler. The accounting team sends lien waivers with the pay application and collects waivers from the subs when they are paid. Retention on a sub follows pay when paid and gets tracked on the sub's pay application, so the figures come from one document everyone can see. National Lien Services handles waiver management for subcontractors.
Which part of the system fixes this?
The step is number 08, standards and accountability. Five hours a month of owner time, spent projecting the work. It's drawn from chapter 8 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% after taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Send the waiver with the pay application it belongs to, so the amount comes from that document.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 08 depends on step 03, overhead calculation and step 06, project management and step 07, monthly cadence. Install it ahead of those and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.