Managing Lien Waivers in Acumatica Construction

acumatica construction lien waivers

If you’re in the construction industry, you’ve likely already dealt with lien waivers. But too often, these complex legal documents are overlooked because honestly, they can be a pain in the a$$. That is, unless you’re using Acumatica Construction Edition that manages the lien waiver documents and processes for you. Here’s how.

What is a Lien Waiver in Construction?

First things first …

A lien waiver is a document signed in exchange for payment that waives the signer’s right (i.e. subcontractor) to file a lien for the amount specified in the waiver. You can think of lien waivers as the construction industry’s version of a receipt for payment.

On most construction projects, the general contractor will request, collect, and track lien waivers from everyone on the job when they are paid. This includes contractors, subcontractors, material suppliers, equipment rental companies, and any other party to the construction project.

Lien Waiver Setup in Acumatica Construction

In Acumatica Construction, you can set up the automatic generation of either conditional or unconditional lien waivers (see below for additional detail) or you can create them manually. In both cases, the lien waivers can be edited as needed.

Acumatica automatically generates lien waivers for the vendors that belong to the vendor classes that have the Generate Lien Waivers Automatically check box selected on the General Settings tab of the Vendor Classes form.

For each particular project, you can configure the list of vendors for which the lien waivers should be generated by specifying the applicable vendor classes on the Compliance Settings tab of the Projects form. For each vendor class, you specify a minimum commitment amount so that lien waivers are automatically generated for each project commitment whose amount is larger than or equal to the specified minimum amount.

Acumatica Construction Lien Waiver
Sample of Lien Waiver in Checks and Payments

Conditional Lien Waivers

Acumatica Construction can generate two types of conditional lien waivers: partial lien waivers and final lien waivers.

You can enable the automatic generation of conditional waivers in Acumatica by selecting the Automatically Generate Lien Waivers check box in the Conditional Lien Waiver section on the Compliance Preferences form. The system will then generate lien waivers upon paying an AP bill.

Conditional lien waivers for partial payment are generated when a progress payment on the project is expected. A signed lien waiver of this type becomes effective immediately after the payment has been prepared.

Conditional final lien waivers are generated in any of the following cases:

  • Entire commitment value is to be paid at one time.
  • The payment in question is the final payment for a commitment, that is, other lien waivers related to the same combination of project, vendor, and commitment exist in the system, and the lien notice amount is specified.

Unconditional Lien Waivers

Acumatica generates two types of unconditional lien waivers: partial lien waivers and final lien waivers.

You can enable the automatic generation of unconditional waivers in the system by selecting the Automatically Generate Lien Waivers check box in the Unconditional Lien Waiver section of the Compliance Preferences form.

Unconditional waivers for partial payment are generated when a progress payment on the project is expected. A lien waiver of this type becomes effective after it has been signed, regardless of whether the payment has actually been received.

Unconditional final lien waivers of this type are generated in any of the following cases:

Entire commitment value is to be paid at one time.

The payment in question is the final payment for a commitment, that is, other lien waivers related to the same combination of project, vendor, and commitment exist in the system, and the lien notice amount is specified.

A final lien waiver becomes unconditionally effective once it has been signed, even if no payment has actually been received. The amount of an automatically generated unconditional lien waiver will equal the amount paid on the accounts payable bill.

Releasing Lien Waivers in Acumatica

Sit back and watch this quick demo to see how the process for releasing lien waivers in Acumatica will streamline your construction business …

Additional Lien Waiver Resources:

Be sure to review the following help topics to ensure you’ve got everything setup and configured properly:

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