When looking for a collection company there are many things to consider and compare. Alexander, Miller & Associates makes sure that the best tactics and approaches are used to collect your debts, and a process that makes business easier on you! Collecting from construction companies is unique.
The phrase “the check is in the mail” has become a legend in the debt collection industry, as well as a uniting cry to describe the frustrations one experiences when trying to collect a debt.
The frustration isn’t restricted to debt collectors, however. Office managers and accounts receivable managers in the construction business know this frustration all too well since it takes longer to get paid in construction than just about any other industry.
Let’s start with the warning first: mechanic’s lien and notice deadlines are no joke. In most states, the lien process involves the following four steps:
In most cases, there are unyielding deadlines associated with each step that are strictly enforced. Missing just one deadline could kill your lien rights on a project.
Here at Alexander, Miller & Associates, we talk to thousands of folks in the construction business every month, and many of these folks have at least one story (or more than one, sadly) about getting burned by a non-paying customer on a construction project.
Too often, there was nothing that could be done about it since the lien rights on the project were already lost due to an earlier missed deadline.
So, what can you do? Well for starters, don’t delay in filing a mechanics lien just because the company that owes you the money is making excuses or otherwise promising to pay you the money you’re owed.
It’s possible that you could be strung along with excuses just long enough for the deadline to file the mechanic’s lien passes you by.
And that would be it- game over. Once your lien rights are gone, they are gone forever. The bottom line is that if you are owed money for materials or labor furnished to a construction project, then you are entitled to file a mechanics lien.
In cases where an sincere mistake-such as a customer forgetting to pay, or misplacing the invoice, or even being too busy to get caught up on their accounting-is the cause of the payment issue, the best thing to do are also pretty easy and immediate:
While each of these steps are pretty non-confrontational, we suggest that you do this over the phone. That way, if you actually get someone on the phone (as opposed to just leaving a message), you can offer to take their credit card over the phone right then and there.
They’ll have a tough time getting out of paying you then!
In cases where you have good reason to believe that the non-paying customer has not made an honest mistake, it’s time to leverage some stronger tools. If you think the excuses you’re getting are just made up, then ignore them and act.
The notice of intent to lien is a beautiful document. Sending a notice of intent lets your customer know that, when it comes to getting paid, you mean business.
No one wants a lien filed on their project, and this notice gives your customers a chance to resolve the dispute before a lien is filed. It’s like a warning or demand letter that actually works because the consequences of ignoring it- a mechanic’s lien claim – are so significant.
A notice of intent is usually enough to prompt payment, but if it doesn’t, then you should go ahead and file a mechanics lien, especially if your deadline to file is fast approaching.
Mechanics liens are extremely commanding tools that have been specially created for the benefit of the construction industry. It would be a waste to go unpaid without leveraging this power.
What if you could avoid a non-payment situation from the get-go? Not only do companies that send preliminary notice on their construction projects get paid faster, sending notice is the first step that’s often required to secure your mechanics lien rights.
In fact, our data shows that sending a preliminary notice is enough to get paid 99% of the time, without ever having to file a lien. Why? Because when you send preliminary notice, the recipient knows that you’re actively managing your receivables and that you take getting paid very seriously.
Start sending notices on all of your projects, and then the next time you hear an excuse about a late payment, all you’ll have to do is remind your customer that you’ve secured your lien rights. They won’t give you any excuses after that!
When looking for a collection company there are many things to consider and compare. Alexander, Miller & Associates makes sure that the best tactics and strategies are used to collect your debts, and a process that makes business easier on you!