Finn's Finance Advice

Follow These Tips When Trying to Recover Your Construction Debt

by Harper Snyder

People who are owed debt fully understand that when they are told the check is in the mail, it possibly means another long wait which ends with no cheque. The hide and seek games can be frustrating; not only to the collectors but also to the office managers and receivable managers. Here are a few ways in which you can prepare for the excuses and use wisdom to corner the delinquent customers and push them towards paying their debt.

Countering excuses for a missed deadline

One of the tactics that are most common with debtors is using excuses to justify a missed deadline. The lien process involves some or all of the following steps in the country:

  • Sending a preliminary notice
  • Sending an intent notice
  • Filing a mechanics lien
  • Enforcing the lien

Note that when you allow your non-paying customer to miss a deadline, getting a lien becomes progressively complicated. The more understanding you are with the non-compliant customers, the more significant your losses will be when you are unable to enforce the lien. Also, note that you are allowed to file a mechanics lien if customers are unable to pay back the money they took from you to actualise their project.

Constant reminders

Another tactic which works well when handling debt is continuously reminding the customer about the money that they owe you. In case the customer made an honest mistake such as forgetting to send the money or getting caught up in their math, consider taking these steps:

  • Remind them they owe you money.
  • Resend the invoice, if they claim to have misplaced it
  • Create natural payment alternatives such as credit card over the phone and online payments.

These steps are non-confrontational, and they allow you to keep a level of good faith between you and the customer.

These are easy ways in which you can manage your debt. It is important to remember that when you show the customer you are serious about getting paid, they will do their best always to have their money on time. The moment a customer gives you an excuse for a late payment, secure your rights to a lien. This will send a message to the customer that you mean business. They will organise their finances knowing that if they miss a payment, you can go the entire length of getting lien rights to secure the money that you lent them. 

For more information, contact your local construction debt recovery service today.