Cash is king and money in the bank is almost always a good thing but should you accept and then cash a check for the full amount of a contract's value? Maybe, maybe not. This article by The Lien Zone discusses what to do and what could happen if you receive a check that includes a "Paid in Full" note. Hint: Don't cash it. The same can be said for cashing checks in an amount that pays your contract in full whether noted or not. Do you have open change orders or claims that have not been formally adjusted into the contract? If you do, don't cash, or even take, the check. Doing so can "close" the contract and make further change order and claim requests difficult or impossible to close on and add to the contract. How about waivers? Well, obviously, don't sign a final waiver if your project or billings aren't complete. If there are open negotiations or requests for additional compensation, signing a final waiver can sink your ship. Some payers will accidentally do this as part of their payment process when the current contract amount is paid in full. Sometimes, someone who is responsible for issuing checks might accidentally ask for a final waiver. In some instances, an attempt to have a final waiver signed in order to be paid while additional change requests and claims are open might be intentional. That's not cool but no matter the reason why, don't sign the waiver. This might mean waiting longer for payment. Hopefully, you have a little cash in the bank or are cash positive on the project so waiting a bit for the right payment is doable. If cash is tight, getting paid soon might create a short term gain at the expense of uncompensated work later on. The best decision is to not accept anything that looks like being paid in full or the final payment until all work is done, all change requests are negotiated and all claims are settled. It's easier said than done but project and company finances will benefit in the long run.
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