When I think about education and my customers, my credit manager heart always skips a bit of a beat. Most roofers don’t put enough emphasis on educating themselves on the protection and collection process. As a credit person, I usually only find out there is an issue when I can’t get paid from one.
Anytime I can have a conversation about how my roofing contractors can protect their accounts receivable and keep their cash flowing freely by keeping on top of the collections I am happy to walk them through the steps and processes to make that happen.
The quickest way to watch that cashflow? Have someone in your office who is responsible for watching out for your mechanics lien rights by securing them with a preliminary lien notice or filing the lien or making collection calls along with follow up calls.
[Editor’s note: Nolo.com defines a mechanic’s lien as “…legal documents that essentially reserve the rights of the filer to seek unpaid compensation. Mechanic’s liens create a cloud on title, meaning that they appear in public property records. Liens are sometimes said to “travel with the land,” meaning that anyone who buys your house would take the property subject to the contractor’s lien (or, more likely, demand that you pay it off first).]
Most roofers do not do enough to protect themselves. They trust the homeowner is going to pay them and they do not utilize mechanics lien rights to protect themselves. Most are afraid they will offend the customer.
By walking my customers (roofers) through the process and teaching them how to have the conversations with their customers, it educates and protects everyone, including suppliers. Explaining to the homeowner why you are securing your lien rights, whether it is required by your state law or not, you are protecting both of you and no one gets a surprise.
I work with various industry associations and organizations like yours to help educate on a larger scale. The more we take the mystery out of the process the easier it gets!
Thea Dudley is an expert credit and collections officer, having spent 30 years in the construction field working for contractors and distributors. See her full bio here.