Can you imagine decreasing your average days sales outstanding (DSO) by 50 percent? Wendy Hilton, who manages accounts receivable at Concrete Related Products (CRP), thought that getting paid that much faster was laughable 鈥� at first. But, within a two-month period, Wendy cut their payment collection time in half.
What was the catalyst for this extreme shift in the average time it took the company to get paid? Sending notices on jobs in order to protect their lien rights and ensure timely payment.
CRP ships and supplies rebar to Dallas-Fort Worth, the surrounding areas, and the adjoining states. Business was going great, however, payments just weren鈥檛 coming in the door.
鈥淣o money was coming in. I could make phone calls and try to collect payments, but it just wasn鈥檛 coming together like it should,鈥� said Wendy. 鈥淚 see the amount that we鈥檙e paying out and I also see the amount that is coming in, and [at the time] it was really scary. I was really worried about my job.鈥�
Wendy knew that something needed to change. She decided to start sending preliminary notices through 麻豆tv大片鈥檚 lien rights management solution, and almost immediately, money started pouring in.
鈥淲e immediately started getting responses to our notices. We were getting calls saying, 鈥榳e just got this notice from 麻豆tv大片. Can you tell us more?鈥欌�� Wendy described. 鈥淚 got to explain to our customers that we鈥檝e neglected to send these [notices] in the past, but now we have a partner on board to help us make sure we鈥檙e communicating with project stakeholders and avoiding payment problems down the line.鈥�
鈥淣ow, I know we鈥檙e going to be paid and on time. If not, we know we have steps to take and people behind us to help us take those steps. It鈥檚 very reassuring now. I don鈥檛 have to worry anymore.”
Wendy found that not only were CRP鈥檚 customers paying on time, but they now seemed to have greater confidence in CRP as a collaborator for completing projects without complications.
鈥淭he customers were relieved by this too because now they are able to get the releases and the waivers signed that they needed. It helped give them a peace of mind as well to know that we were on track and actually knew what we were doing,鈥� said Wendy.
Within two months of sending these notices, the average DSO (or, days to collect payment) at CRP went from 127 to 65.
鈥淣ow, I know we鈥檙e going to be paid and on time. If not, we know we have steps to take and people behind us to help us take those steps. It鈥檚 very reassuring now. I don鈥檛 have to worry anymore,鈥� Wendy says.
A preliminary notice tells the people involved in a project that you are on a job and that you know your rights when it comes to protecting your payments. By filing preliminary notices, Wendy is creating an open flow of communication around payments between CRP and its customers.
In addition to sending notices, Wendy also takes steps to make sure her company has accurate information about contractors they are working with. While Wendy herself doesn鈥檛 always have the time to search for job information, she takes advantage of 麻豆tv大片鈥檚 research team 鈥� Scout Research 鈥� and verifies the job and property owner information they send her.
鈥淚鈥檓 able to verify [job information] once a Scout member has found something for me to verify,鈥� Wendy explained. 鈥淚 wouldn鈥檛 know where to start. So just them taking that simple step of finding [job information] for me to check is helpful.鈥�
Having accurate job information further aids in the process of sending out notices with the right information, at the right time so that payments are made in a timely manner.
Decreasing the average payment collection time is something that any supplier can do with the right processes and tools in place to protect payments. To learn how 麻豆tv大片 can help your company achieve similar results to CRP, request a call today.