CoatingsPro Magazine

JUL 2016

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

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14 JULY 2016 COATINGSPROMAG.COM Money Matters H aving a secure credit and collections process is key to any successful business. But how do you do that without losing the human element? For coatings contractors, your customers are your heart, and without proper care and a process that incorporates your corporate culture, angry customers may go astray to your competitors. It's important to remember that companies and people struggle fnan- cially from time to time. I'm sure you or someone you know has been in a fnancial pickle, and often just a little understanding helps. Sometimes, when you give people a chance, you get the best results out of them and develop the strongest business relationships. At the same time, though, you need to be able to separate emotions from business and implement efcient business practices that deliver results. Here's to ensuring that you get paid — without losing the human touch. The "Top 10" Approach Start inside your own organization: It is crucial to get your sales team and credit department on the same page frst. Let them know what the expectations are regarding working with the customers and what they' ll be accountable for internally. Ten, follow a frm and consis- tent process with your customers. Try following this Top 10 approach: 1. Get It in Writing. The first thing you need to do is get your contract in writing. It will be much easier to prove your point in court than relying on some type of verbal agreement based on a handshake. 2. Secure Your Payment. You need to secure your rights to be paid with some type of legal instrument, whether it's sending a preliminary notice, recording a construction lien on real property, Uniform Commercial Code (UCC)-1 form on materials, or filing a claim against a bonded project. It's critical that you secure your right to be paid. Each state has different requirements. 3. Bill Regularly. The worst thing that you can do is send bills sporadi- cally. Your customers need to know that you're serious about getting paid. They should be able to set their watches on the bills that they receive from you. Don't harass, but do be regular. 4. Limit Your Credit Risk. You can limit your exposure by limiting the credit you give. It's much easier to suffer a loss of $5,000 than $50,000. You need to make credit decisions based on the credit risk of the customer, and each customer will be different. 5. Contact Delinquent Accounts Often. So you have a delinquent account; what do you do? Yes, you must do the obvious and contact the account holder. Do it verbally and in writing — nicely and firmly — and do the best you can to get the customer to start paying you. 6. Resolve Disputes Quickly and in Writing. Sometimes your customers will tell you that the goods arrived late or that they are unhappy with your service. Try to resolve these issues yourself. It's better to give a small credit in exchange for a payment, and move on quickly rather than to have any extended disputes with your customers. 7. Negotiate With Decision Makers. Whenever you're negotiating either the contract or a delinquent debt, make sure you're negotiating with someone who has the authority to make decisions. Avoid the frustra- tion of negotiating with someone at the company who has no real authority in the matter. Deal with someone who can actually move the ball forward to getting you paid. 8. Condition Any Credit on Prompt Payment. If you decide that you're going to provide a credit in exchange for an immediate payment, make sure that that condition is expressly set out in a written agreement (this can be in an email). The last thing you want is to give a credit and then keep waiting on a promised payment. 9. Don't Delay in Initiating the Legal Process. Once you determine that there's nothing more you can do yourself, don't wait to enforce your legal rights. Get to your lawyer as soon as possible. Every day that goes by will make it that much harder to collect the debt owed to you. 10. Avoid Emotional Decision Making. Leave your emotions at the door when you deal with credit issues; it makes resolving a business dispute much easier. The same applies in collecting a debt. Essential Points A ll of the points are worth consider- ation, but the second one, securing your payment, is the most essential. If you do not have a direct contract with the owner of the property, most states require a preliminary notice within a specifed period of time from frst By Ariela Wagner, Founder of SunRay Construction Solutions A Proven Approach to Getting Paid

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