Material suppliers are in a difficult place in the construction payment landscape. Compliance with lien and bond claim requirements in order to gain the protection of security is difficult and full of challenges, and the financial risk is high. Because material suppliers are at the bottom of the payment chain in the vast majority of construction projects, there are many potential places for money to get stuck.

While mechanics lien laws and notice requirements vary greatly throughout the country, it is a relatively constant fact that material suppliers get hit with the most stringent requirements. This is interesting, but makes at least a certain amount of sense, since material suppliers often never actually set foot on the project itself, despite being owed substantial amounts of money.

Despite, or perhaps even because of, these potential hurdles, material suppliers are well-positioned to benefit from technologically implemented lien and notice policy.

The benefits to a comprehensive mechanics lien and notice policy are numerous. Remaining in a secured position when material (and/or labor) is extended on credit is hugely important for companies in the construction industry, and benefits include: faster payment, virtually nonexistent write-offs, the ability to pursue more business and more.

It's a nearly universal requirement that material suppliers send preliminary notice in order for extensions of materials on credit to remain in a secured position. This can be burdensome because many material suppliers have a large volume of projects — and a large volume of projects results in a large volume of required notices, all with different requirements.

However, the fact that preliminary notices are almost universally required for material suppliers can also streamline a notice policy. If a preliminary notice is nearly always required, there are few times in which it must be determined what to do if no notice is required.

Since, as noted above, many material suppliers have a large volume of projects, with large numbers of notices and a large number of differing requirements, it is historically difficult for material suppliers to meet the notice burden efficiently.

This is the realm of technology.

The good news for material suppliers is that their challenges are all challenges that can be solved by the adoption of technology platforms. The things that make it challenging for suppliers to manage complex security rights happen to be the exact same things that can be solved by technology platforms.

The management of vast amounts of complex data, and applying specific actions to that data, is right in the wheelhouse of computer ability. Using a technology platform to manage and optimize notice and lien compliance allows material suppliers to offload that burden by streamlining and automating a complex process, and still retain the benefits.