Our Miami contractor attorneys know that the construction industry has significant credit challenges. There is a constant need to balance the reduction of financial risk while increasing revenue. Although it can be challenging, the following tips will help you to manage your account receivable well. This article wraps up our two-part series, refer back to part one to learn more.
Consider a Subscription Plan
You can try to seek payment on your own, including writing your own demand letter, but we don’t recommend it. When you have an experienced construction attorney on your side, a delinquent owner is more prone to pay up to avoid future litigation. With a subscription plan in place, you receive open access to our attorneys at an affordable monthly rate. Our attorneys can draft an unlimited amount of demand letters for you to seek payment when you have a plan in place.
Managing Credit Decisions
Create both a credit and lien policy. You may want to be generous with your clients, but you must use wisdom. With a policy in place, you will establish who qualifies for credit and when to extend credit. You will also know when lien rights will be preserved and enforced. Not only should you know your own financial limits, but you should understand the level of risk you’d be exposing yourself to based on the client you’re dealing with. Some clients you may be able to extend more credit to while others you’d have to establish stricter limits.
Only Deal with the Key Person
As collecting payment is a time-consuming process, it’s critical that you don’t waste any effort negotiating with the wrong people. In other words, if you are seeking payment, discuss the issue with the person that can actually cut the check. If your client refuses to pay, you have recourse such as filing a lien against the property.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.