Many successful roofing contractors expect 2015 to be a turn-around year, and to make sure they get their share of new business – from both construction and disasters – most believe they need two things:
- First, cash flow, so they can take advantage of every opportunity.
- Second, technology, so they can win more bids – while knowing that the job will generate cash flow.
Regarding the first, Optio Solutions offers some of the most effective recovery services in the industry. With it, roofing contractors can remain agile in the field by off-loading their collections without compromising customer relationships — or negatively impacting cash flow.
Protecting Cash Flow with Optio Solutions
That’s because while many collection agencies demand up to 50% of the outstanding invoices they collect, Optio’s unique service divides the process into two phases.
“Strategy I” consists of low-key, polite methods costing less than $20 per customer and fully branded with the contractor’s contact information. Still, they clearly indicate to the customer that collection efforts have ratcheted up a notch.
Mastercraft Exteriors
“I would say that to get paid we have to do further work than just send the bill about 50% of the time,” said Carrie Williams, the Account Receivables manager at Mastercraft Exteriors, a new Optio customer and disaster recovery roofing company 
based in Illinois with offices in thirty-seven states.
“In the past we’ve worked with other collection agencies, and they sent demand letters and also made phone calls. But for whatever reason it just didn’t work very well,” she said.
“Out of all the customers we sent to other collection agencies, I don’t think we collected $1,000.”
General Manager Pius Coles IV of Guardian Exteriors, a seven-state contractor headquartered in Duncanville, Texas, similarly estimated that upwards of 40% of his customers require extra effort to collect what’s due.
“We do all of our collections in-house for the first 45-days,” he explained, “and then we invoke the Strategy I process with Optio.”
Since Strategy I simply asks the delinquent customer to contact the contractor, customer relationships remain completely in-house.
“I have an opportunity to say, ‘First and foremost, it’s just our procedure that at 45 days all accounts go to Optio,’” Coles said, “’and in Strategy I it’s not going to affect your credit.’”
Guardian Exteriors
A long-term customer, Guardian has recovered 39% of its receivables through Strategy I.
“Strategy I is what I love the most about Optio,” said Coles.
It starts working right away, too.
“The format through Optio is great,” Williams said. “We’ve had a lot of success with it in just the short amount of time we’ve been working with [Optio].”
“When we’ve sent billings and letters and we’re not getting a response, or when we’ve spoken to the customer and they indicate that they just don’t feel they should pay – that’s when we give it to Optio.
“And we’ve already received thousands of dollars,” she said.
In fact, in Mastercraft’s first seventy-five days, Optio resolved 44% of the invoices it handled.
More importantly, from a cash flow point of view, Mastercraft’s cost of collection came to only 0.92%, meaning they paid less than a penny for every dollar collected – considerably better than the forty or fifty cents that most of Optio’s competitors would charge.
Measurable Results
Mastercraft has yet to send any customers to Strategy II, but Guardian’s experience shows how well the combined Strategies can work.
In fact, Coles uses Strategy I to make sure his customers don’t escalate to Strategy II. He does this by assuring customers who respond to Strategy I that it will not affect their credit.
“I’ve let them know, ‘Hey I know that you’re cool and we’re buddies, and everything’s great, but we’re serious about getting our money.’ And the customer says, ‘Ok, I understand that, so long as it doesn’t affect my credit.”
“I say that because I want them to understand that there’s a second stage,” he said.
Strategy II involves escalated efforts that will culminate in legal action, and Optio charges industry-standard fees for this service.
But Coles has found that putting customers into a standardized collections process right from the start virtually eliminates the need for escalation.
“Only 10% will hit Strategy II,” he said.
The two strategies combined have returned 52% of Guardian’s outstanding receivables, feeding his cash flow.
Mastercraft’s Williams has already seen how well the process will work for her. Regarding Strategy I, she said, “You’re not losing any of your money other than a small fee … per customer.”
“And we haven’t even got to the point where we move on to Strategy II,” she said. “I don’t think a lot of our customers will even need to get to that point because Strategy I does work.”
And there are significant advantages beyond cash flow. “Optio has already freed up a lot of my time,” she said, “as well as my coworkers time. We share a lot of the collection duties. It takes that burden off the customer care representative to call [the delinquent customer] repeatedly, and the burden off of me to send them letters.
“We’re still in control of the situation with the customer,” she added, “But it frees up a couple weeks worth when we can say, ‘We don’t have to do this; it’s at Optio.’”
Making Time with AccuLynx
Protecting cash flow protects both of these companies’ businesses, and as you might expect both of them use the freedom Optio creates to attract new customers.
And that’s where technology comes in. In its State of the Industry report, Roofing Contractor magazine said that technology 
has become a significant differentiator – and a key one for closing sales. With dozens of people working on far-flung bids and projects, efficient management becomes challenging.
Both Guardian and Mastercraft use the bidding, planning and invoicing software AccuLynx to manage their business. They know that customer confidence grows when they create accurate estimates efficiently and when they demonstrate a history of completing projects on schedule.
“We act as a general contractor,” Coles said, “and most clients need more than just the roofing trade to actually get completed. [In Acculynx] there are different phases for each job. Each starts out as a lead, then it goes to a prospect, then it goes to an approved job where we’ve got a contract and are actually engaged in doing the work.”
The software helps create estimates to win business, and once it’s won it becomes a repository for all the documents related to a project. “Homeowners rely on us to do a lot of the back-end paperwork and follow-up,” Coles said, “We store all of that in AccuLynx.”
Since Optio has become part of his invoicing process, he would see a clear advantage for integrating Optio into the AccuLynx workflow.
“[In AccuLynx] there’s an ‘Invoiced’ stage, and then a ‘Closed’ stage,” he said, “In between those two would be a perfect opportunity for a ‘Send It To Optio’ stage.
“When I move a client to Optio now I have to email a copy of the contract, a copy of the insurance bill, a copy of things that are written up to provide proof. Well, all of that’s in AccuLynx. So if Optio had access to it that would make that process so much easier.”
Mastercraft’s Williams concurs. “If there was an export button that said ‘export this customer to Optio,’ and you could choose when to do so, that would be great,” she said.
Even without automated integration, the two systems mesh smoothly.
“Acculynx allows us to keep track of where all the properties are and what their current status is,” Williams explained.
“Optio allows me to get paid quicker,” Coles said, “and probably guarantees that I get paid.”
Both companies expect the combination to continue serving them well.
