“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 disaster recovery roofing company based in Illinois.
Sound familiar? Her explanation for why this happens may strike you as familiar as well:
“Nine times out of ten when we don’t get paid within thirty days, the reason is that [the customer] kept their second or third insurance check.”
So what do you do?
Being Cool Isn’t Enough
You might look at what Mastercraft did. They have about eighty employees and offices in thirty-seven states. Like many successful specialty contractors they use AccuLynx, a business management and estimating software, to manage their extensive operations.
“Acculynx allows us to keep track of where all the properties are and what their current status is,” Williams explained, “and we can change the job to different statuses” as it progresses.
Since they focus on disaster recovery, the initial status for many of their far-flung projects is “extensively damaged.”
“We watch the weather constantly,” Williams said, “Whenever there’s certain storm conditions we spring into action [and] basically send a troop of people out there. We can be up and running in 24 hours.”
This impressive capability also helps them expand. The company, which was established in 1996, set up offices in Colorado and South Carolina to respond to storms, and both offices became permanent.
They’re excellent neighbors, too. “As a team we get together several times a year and go out into the community and participate in charity events and functions,” Williams said. While they’re there they take care of the environment: “In 2012 and 2013 we were chosen by Owens Corning as the recipient of the Top Performer Award in the Shingle Recycling category.”
Unfortunately, as many contractors know too well, good deeds and effective management don’t translate into prompt customer payments.
Williams generously suggested that “sometimes the customer is just not clear on why they owe a certain amount.”
But whether the customer gets it or not, supplemental and final insurance payments that should be paid to contractors often end up in the customer’s bank account, and collecting these receivables can be a significant burden – even for large businesses.
Old School Collections Aren’t Enough, Either
Mastercraft’s first efforts to hire collectors didn’t translate into receipts.
“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,” Williams said.
“Out of all the customers we sent to other collection agencies, I don’t think we collected $1,000.”
Making that situation even more painful is the fact that those agencies took up to 40% of what they collected as their fee, making their paltry results even less lucrative.
Upon searching for a better way, Mastercraft discovered Optio Solutions.
Optio Solutions Delivers
“The format through Optio is really great,” Williams said. “We’ve had a lot of success with it in just the short amount of time we’ve been working with them.”
“When we’ve sent billings and letters and we’re not getting a response,” Williams said, “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.
Optio not only produced results where others failed, but more of those results made it to Mastercraft’s bottom line. That’s because Optio charges a flat fee per customer to initiate “Strategy One,” the demand letter phase of the collections process.
“You’re not losing any of your money other than a small fee, which in our case is under $20” per client, Williams said.
“And we haven’t even got to the point where we move on to Strategy Two, which includes phone calls,” she said. “I don’t think a lot of our customers will even need to get to that point because the letters do work.”
Benefits Beyond Money
Optio also provided Mastercraft with something that may be more valuable than revenue: time.
Like many privately held companies, to compete they need to be agile. Williams certainly is; she started there in 2006 when there were only five employees. Her responsibilities have expanded along with the business, so that now she handles not only receivables and collections but also the insurance companies, customer-related legal issues and financing.
“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 said, “But it frees up a couple weeks worth of time when we can say, ‘We don’t have to do this; it’s at Optio.’”
With Optio producing significant revenue and saving significant amounts of time, Williams said that she’d like to see an automated integration with AccuLynx.
“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.
Imagine that – turning on revenue and creating time with one click! We’re not there yet, but you can certainly accomplish the same thing with one phone call. Learn more today.
