When dealing with surety bonds, funds control is a way to ensure the proper use of funds and prevent fraudulent issues from occurring. Sureties face the challenge of potential financial risk if contractors fail to meet project deadlines. 

Funds control is effective because it ensures that the money intended for specific projects goes where it should. The proper allocation and management of resources can aid in timely project completion. 

We provide the services that sureties need to reduce project risk by meticulously tracking construction project expenses and ensuring prompt payment to subcontractors and suppliers.  

Securing Surety Bonds Partnered With the Funds Control Tool Protects the Construction Project

Contractors have to pay their subcontractors on time. This is where our services become crucial. Our service provides protection in the event a contractor fails to meet their obligations. 

Moreover, it reduces the risk of misappropriation of funds and verifies that everyone receives payment for any work they complete, labor they provide, or material they supply.  

Complications

Construction projects do not always run smoothly. In response to this, our service protects sureties by accurately monitoring a contractor’s overhead and profit, which ensures the correct payment amounts to the contractor to the extent funds remain after subs and suppliers have been paid. There is always a slight risk that contractors may misappropriate funds and underpay. To counter this, we act as a safeguard, ensuring costs are calculated correctly. 

Complications can arise on a project. Despite this, it’s crucial for contractors to accurately calculate costs and expenses, even in the face of delays or challenges. 

Necessary Requirement

During a project, contractors may face challenges that threaten their financial stability, like rising material costs or an underestimation of the work’s scope. Despite having secured a bond for the project, these situations require the contractor to make necessary financial adjustments. In some cases, a contractor might resort to borrowing funds from other projects to cover unexpected expenses. 

Mishandling funds like this can cause a project to fail, quickly leading to a contractor running out of funds on other projects. NACS protects project owners and the surety by preventing the co-mingling of project funds and ensuring the bonded jobs funds remain on the bonded project. 

Keeping the Focus

Backlogs happen, especially in the construction industry. It’s not uncommon for contractors to take on multiple projects, leading to potential backlogs and oversight issues. Suppose a contractor decides to take on a job for two separate cities at once. Then, they underestimate the expenses they need to complete the job on either job. Our funds control services ensure that everything stays within the contracted terms of the bond. This adherence safeguards the survey from contractors who might stray from the financial boundaries of project estimates.  

Protecting Surety Bonds

Although implementing funds control changes the typical process for project funds distribution, it protects those with a vested interest in the financial risks of a surety bond, and those involved with the project benefit from this service’s additional oversight. 

NACS ensures a careful calculation of profit and overhead while eliminating front-loaded contracts that could sway the project astray. Moreover, we provide an additional layer of security by attaching lien waivers to each check payment and helping ensure contractors are meeting their current financial obligations to subcontractors and suppliers. 

About NACS

North American Construction Services, Inc. is an experienced funds control / escrow company in the contract surety industry. Founded in 1991, NACS brings additional protection to national sureties by managing the receivables and payables throughout the course of the bonded construction project. In addition to added Surety security, NACS assists small, emerging, and minority construction firms seeking the performance and payment bonds necessary to secure construction contracts.