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10/8/24 Paving the Way: Mechanics' Liens and the Evolution of the Dollar Sign

October 09, 20245 min read

Who You Need To Know:

This Week's 'Who You Need to Know': Meet Kevin Gray! Owner and Founder of Pave It Forward!

Building a Foundation of Integrity: The Kevin Gray Way

At the heart of any successful company lies a set of values that drives every decision and action. For Kevin Gray, owner of Pave It Forward, paving isn’t just about laying asphalt—it’s about building trust, fostering community, and creating lasting impact. Under his leadership, the company has become a trailblazer in the paving industry, setting new standards with every project and within every community they serve.

If you're a Kentucky resident or property manager in need of asphalt installation or repair, we’re a local paving contractor with over 15 years of experience. Our team is dedicated to delivering a seamless project, no matter the scope. Reach out for a no-obligation consultation—we're here to help!

https://www.paveitforwardllc.com/

Check Out Kevin's Podcast!

Money Talks:

The Origin of the Dollar Sign ($)

Ever wondered how the dollar sign ($) came to be? Turns out, it all started with the Spanish peso! Back in the day, people abbreviated it as “PS” when keeping track of their money. Over time, writing out "PS" got tedious, so scribes got creative and began combining the two letters. They simply placed the “S” over the “P,” and voilà! The symbol we now know as the dollar sign was born. It’s a bit like the original money emoji, made by hand.

As the U.S. dollar gained popularity, this clever symbol caught on around the world, becoming a global icon of money, wealth, and trade. It’s now seen everywhere, from luxury brands to cartoon characters dreaming of riches. Who knew that a little scribal shortcut would turn into one of the most recognizable symbols in modern history? Not bad for something that started as a bit of lazy handwriting!

Tips and Trivia:

The Lien Factor: Why Accurate Bookkeeping is Key for Construction Businesses

In the construction industry, mechanics’ liens are a powerful tool that protects contractors, subcontractors, and suppliers when payments are delayed or withheld. A mechanics’ lien allows you to secure payment for work completed by placing a legal claim on the property. This ensures that if a client refuses to pay, the contractor has a legal right to seek compensation through the value of the property itself.

How Mechanics’ Liens Work:

When a contractor or supplier isn’t paid for their work, they can file a mechanics' lien against the property where the work was performed. This lien must typically be filed within a specific timeframe, which varies by state (in Kentucky, for example, contractors have 6 months from the last day of work to file). Once filed, the property cannot be sold or refinanced until the lien is settled, creating a strong incentive for the property owner to resolve the debt.

The Role of Accurate Bookkeeping:

Accurate bookkeeping plays a critical role in the lien process because it provides the documentation needed to support the claim. Here's how:

  1. Detailed Recordkeeping: To file a lien, you need precise records of the services rendered, the materials used, the agreed-upon contract terms, and the outstanding balance. Poor bookkeeping or missing invoices can weaken your claim or delay the process.

  2. Timeline Tracking: Deadlines are crucial when it comes to mechanics’ liens. Bookkeeping helps track important project dates, like when work started, when materials were delivered, and when work was completed. These dates determine whether you’re eligible to file a lien within the state’s legal timeframe.

  3. Change Orders and Add-ons: Construction projects often involve changes to the scope of work. Every change order must be properly documented and reflected in the final invoice. If change orders aren’t tracked, you could miss out on collecting full payment, reducing your lien amount.

  4. Labor and Material Costs: In addition to labor costs, bookkeepers need to track material costs. Mechanics’ liens can cover unpaid labor and materials, so having records of every purchase—along with receipts and vendor agreements—is critical to filing an accurate claim.

  5. Lien Waivers: After payments are made, property owners often request lien waivers, which waive your right to file a lien for that specific portion of work. Keeping track of partial payments and ensuring lien waivers are signed at the right time is another key task for bookkeeping. A mix-up could result in missed payments or forfeiting lien rights.

  6. Compliance with Legal Requirements: Some states have additional legal requirements when filing a lien, such as providing a preliminary notice to the property owner or general contractor. Bookkeepers help ensure that all required notices are sent on time and are properly documented in the financial records.

  7. Lien Enforcement Costs: Filing a lien also incurs costs, including legal fees and court filing costs. Good bookkeeping tracks these expenses, allowing you to recoup these costs as part of your lien.

Why It Matters:

Without accurate financial records, filing a mechanics’ lien can be a complex and difficult process. Missing documents, incorrect invoicing, or poor contract tracking can all jeopardize your chances of getting paid. Reliable bookkeeping ensures that every penny owed is accounted for and every deadline is met, so you can protect your business and get compensated for your work.

In short, proper bookkeeping isn’t just about balancing the books—it’s about safeguarding your right to be paid for the services and materials you provide, particularly when dealing with large construction projects where the stakes are high.

TRIVIA TIME!

Respond to this email with your answer to be put in the September drawing!

Congratulations Ted Riggs for winning the September prize!

What is the primary purpose of bookkeeping?

A) To prepare tax returns

B) To maintain accurate financial records

C) To create marketing materials

D) To analyze market trends

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so you can mind your business

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From keeping your books balanced to making sure your team gets paid on time, we specialize in taking the stress out of your finances. Our all-in-one services include everything from bookkeeping magic to payroll wizardry, plus we’ll handle your A/P and A/R like pros. We’ve got the tools to meet the unique financial needs of your business, so you can focus on what you do best—running the show!

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