More Paperwork for the Construction Industry

On 20 November 2013, the Building and Construction Industry Security of Payment Bill 2013 (NSW) was given royal ascent. The new laws make substantial changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the “Act”).

Heres a must read article on this subject by Damin Murdock;

This article will discuss the most notable ways in which your business has been affected by these legislative changes, namely;

• changes to the way progress claims are made;
• due dates for payments of progress claims; and
• the requirements of supporting statements from head builders.

?Claim Changes ??Previously a payment claim was to be made in accordance with s 13 of the Act. There, it was required that you:
• detail the type of work carried out;
• the amount claimed; and
• include a statement that the claim was made in accordance with the Act.

?The Act now provides that any payment claim for any work carried out on a construction contract, regardless of form, is deemed a payment claim under the Act (unless the claim is for work done on residential property).?? Change in payment dates?? Previously, payments of a payment claim were to be made within 10 business days of the payment claim being made, pursuant to s 14 of the Act. However, the new law splits the maximum payment time as follows:

• a payment to a sub-contractor from a head contractor is payable within 30 business days from the date of the payment claim, or, earlier if stipulated in the contract; and
• a payment to the head contractors from the principal is payable within 15 business days of the demand being made, or, earlier if stipulated in the contract.

?Sworn Statements ??Finally, the head contractor is now required to attach a sworn statement that states they have paid their contractors what is payable, before they can make a valid claim to the principal for a progress payment. ?

If it is found that the sworn statement contains false statements, penalties of up to 200 penalty units ($22,000.00) and/or three (3) months in prison may apply.??There is also a provision for the establishment of a statutory body to investigate the truth of these statements.??Tips:

• Make sure you keep your staff payments up to date.
• Stay on top of your administrative tasks.
• Treat all claims as if they are made under the Act.

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Below is the another powerful email in the series from my friend and world class negotiator Filip Hron.

Have you ever left a ‘difficult’ interaction with an employee, contractor, client or prospective client and
wondered how a world class negotiator would have handled the same situation? The truth is you CAN
take control of every negotiation if you are just prepared to learn how.

Know what they want

“How many of you enter a negotiation having thoroughly thought about what the other party wants?” There
were 33 participants in the executive program I ran for one of the local universities. I looked around the room
and could only make out three raised hands. I had my work cut out for me…

Understanding the other party’s needs and interests in the negotiation is the fundamental key to unlocking
value in negotiations. It’s not about us, it’s about them! We need them. We need them to agree to the final
outcome. And we need them to commit to upholding their end of the deal. And guess what – they aren’t
motivated by having our needs satisfied.

This is the problem with most negotiations. I walk in only focusing on what I want. The other party selfishly
acuses on his or her needs. And then we get surprised when the other party seems to work against us.

Skilled negotiators understand that the primary reason why people don’t accept proposals, suggestions,
or options is that they perceive needs to be left unsatisfied by that proposal, suggestion or option. Thus
if we aren’t persuasive, it is simply a case of us not fully understanding what is important to the other party. The
solution is simple – gain a better understanding of those needs!

In contrast, unskilled negotiators will at this stage try a range of predictable, yet ineffective tactics. One
is to blame the other party for being difficult. I have yet to see this tactic provide any benefit.. Another
approach is to start giving concessions on price. While this can work, it is awfully clumsy (and expensive!). Most
of the time, the primary need that people want satisfied has nothing to do with money, and it will both be cheaper,
easier, and more effective, to identify and satisfy that need directly.

Filip Hron is an expert consultant, lecturer and author on negotiation. He has taught at 7 universities,
worked with multiple global negotiation companies, and collaborated with a range of renowned experts
in international, commercial and crisis/hostage negotiation. In the process he has trained future negotiators
across four continents, and advised on multiple negotiations in the $10m-$10bn range…

You can learn more about Filip and his credentials at www.hron.org. Have a look tell me if that this stuff isn’t
impressive!

To your ongoing success,

Kurt

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If you haven’t heard of Robin, this guy has spent 20 years developing a formula for extreme achievement that has helped millions of people in 100+ countries build lives that matter and realise their highest potential. .

Here are Robin’s 20 carefully chosen quotes that will help you immeasurably…if you live by them…

#1. Dream Big. Start small. Act now.

#2. Victims make excuses. Leaders deliver results.

#3. Clarity breeds mastery.

#4. Education is inoculation against disruption.

#5. A problem is only a problem when viewed as a problem.

#6. All change is hard at first, messy in the middle and gorgeous at the end.

#7. If you’re not scared a lot you’re not doing very much.

#8. Where victims see adversity, extreme achievers see opportunity.

#9. The project you are most resisting carries your greatest growth.

#10. Small daily improvements over time lead to stunning results.

#11. Criticism is the price of ambition.

#12. Potential unexpressed turns to pain.

#13. Ordinary people love entertainment. Extraordinary people adore education.

#14. Your daily behaviour reveals your deepest beliefs

#15. The only failure is not trying

#16. Focus is more valuable than IQ.

#17. To double your income, triple your investment in self-development

#18. Your excuses are nothing more than the lies your fears have sold you.

#19. An addiction to distraction is the end of your creative production.

#20. Life is short. Be of use.

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I recenlty sent you some pearls of wisdom on how to negotiate a sales meeting from a friend
and world class negotiator Filip Hron.

Have you ever left a ‘difficult’ interaction with an employee, contractor, client or prospective
client and wondered how a world class negotiator would have handled the same situation?
The truth is you CAN take control of every negotiation if you are just prepared to learn
how.

Below is the latest article packed full of negotiation advice and wisdom from Filip;

Control the negotiation process

We rarely think about how we negotiate. Rather we do the same thing over and over – we’re
on autopilot. If something is for sale we offer less in an attempt to get it cheaper. When we think
we’re right we fiercely hold on to our view while trying to prove why the other party is wrong.
When things aren’t going well with others we eventually label them as “difficult” or “the problem”.

This is what we do on autopilot, and this is not an effective way to influence others. In fact, in all three
scenarios the other party will predictably resist what we’re trying to achieve – i.e. they will work against
us every step of the way!

As professional negotiators we think differently. We first discover all the different ways that people
are influenced, and then we systematically change one thing at a time until the other party is persuaded.

We call this approach “controlling the process of negotiation”. We want to understand every choice that
you can make to influence outcomes. For instance, should you negotiate at your place or theirs? Via phone,
email or in person? Who should be present? How should the formal topic be framed? Should you start with
agreement or disagreement? With the easy or the difficult issues? Should you use tactics? If so, which ones
and when? What are the risks of each? And so on…

There are thousands of process choices. The good news for you is that many of these are good most of the
time, and many are bad most of the time. For instance, framing a negotiation about who is right and who is
wrong is rarely a good idea. Are you happy to admit being wrong? Of course not, so what makes you think
that they will be…?

Filip Hron is an expert consultant, lecturer and author on negotiation. He has taught at 7 universities,
worked with multiple global negotiation companies, and collaborated with a range of renowned experts
in international, commercial and crisis/hostage negotiation. In the process he has trained future negotiators
across four continents, and advised on multiple negotiations in the $10m-$10bn range…

You can learn more about Filip and his credentials at www.hron.org. Have a look tell me if that this stuff isn’t
impressive!

To your ongoing success,

Kurt

Ps Watch this space for Filip’s future negotiation tips

Remember to visit our new facebook page for your Free Builders Business
Checklist https://www.facebook.com/masterbuilderscoach?ref=tn_tnmn

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Few lessons are more powerful and apparent than real life experiences. A couple of weeks ago I received the email below from a local builder in response to an article titled ‘the 12 biggest bookkeeping mistakes builders make’. I’m sharing his response with his permission after removing his persoanl details. Hands on experience can be expensive, learning from the experience of others is intelligent. Hopefully you get something from this.

Hi Kurt,

Just had a look through 12 bookeeping mistakes.

The main reason small [ and large ] builders go under has been missed again.

In fact I have never read or heard any one reveal the actual biggest problem

As a builder who has done 2 part 10s,and 1 bankruptcy it took me ages to learn what I was doing wrong.

Being in control of monies which were way in excess of what was actually mine, I consumed more than what I actually earnt.

Overcalculation of work in progress, and undercalculation of creditors [a great way to get an increase of your overdraft] equals a day of reckoning.

I have asked many builders what they would do if their personal finances were down and they had rates and school fees to pay ,what would happen if they received say a $25,000 progress payment what they would do. Invariably , all have said that they would pay the bills immediately.

I reply, but that ammount of money from the pp may not be yours and you may have spent someone elses money!

Not helping the situation … creditors wise, is that up to 30 days elapse before you even receive the account from your supplier.

In one instance, a builder I was mentoring purchased a new Nissan ute outright from his frame progress payment. I said to him ” Is all that money yours?” “What creditors have you got to pay from that?” He gave me a figure of what had been invoiced … it was near the end of the month, so I asked further… ” What is the value of your purchases on credit this month? “What ?” he said ” How would I know that? They havent been invoiced to me yet”

Every builder’s order supplied on credit should appear as a precosted order which is added to their creditors to be balanced against work in progress and debtors ….to know your real position.

When I was Estimator for ………….. they had a good system where the cost to finish a project at any one time was referred to as outstanding liability….which it certainly is…it would be good for builders to get their head around this concept.

That builder was before the BSA within 2 years of that, going for 1.6 million. The hole caught up with him on his day of reckoning as it had with me on 2 prior ocasions [ the bankruptcy was not building related but divorce and taxation related]

Since my last episode in 1996 I have stayed clean very carefully monitoring the disbursement of other peoples money which I control for only a short time. The behaviour of some builders is tantamount to a ponzi scheme, as it was, unwittingly with me.

Hope this sheds some light

Kind Regards

……..

Remember to visit our new facebook page for your Free Builders Business
Checklist https://www.facebook.com/masterbuilderscoach?ref=tn_tnmn

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