Issue link: http://read.dmtmag.com/i/105367
32 • FEBRUARY 2013 • WORLD FENCE NEWS Convert receivables into cash quickly continued from page 30 Collection statistics reflect that accounts receivable over 90 days old are only 60% to 70% collectable and go downhill rapidly. Cash flow problems are the major cause of small business failures. Know the cost of past due accounts. If you cover your cash shortfalls with a line of credit, consider that at an interest rate of 10% on your line, every $100,000 in past due accounts costs you $833 per month or $10,000 per year. Also contrary to the general consensus in the fence industry, it is extremely important to collect a major > Blends nicely with any landscape > Durable > Easy to install > Extra strong with "V" braces Earth Friendly... from start to f inish > Secure & Aesthetic > 10 year warranty For more information visit us at: > Available in different heights designmasterfence.com portion of the service charges. If there is no penalty for paying late, why should the customer pay when due? Offer discount incentives for early payment. Remember, to be a good collector, you must be consistent, respectful, fair, but firm. And always – follow up and take notes! In the fence industry it is very important to know your rights and know the rules of collections, especially pertaining to construction statutes. A basic understanding of lien and bond rights and other general statutory protections that provide a means of collection to qualified participants of construction projects is crucial if you are to fully protect your rights for payment. Rules vary greatly between bonded and non-bonded jobs and also from state to state. Know the rules and know your rights before you begin any project. In the construction industry in particular, security generates leverage and secured creditors receive payment priority. In other words, secured creditors get paid first! The construction industry is privileged by having exclusive statutory protections that provide a means of collection, such as lien and bond rights. Normally, bonded jobs require both a payment bond and a performance bond, one designed to make sure legitimate subcontractors get paid, the other to ensure that they perform according to all appropriate specifications for the job. Make sure you take great care in completing all your paperwork and be very mindful of deadlines, retention restrictions and due dates. For most residential and nonbonded light commercial jobs, filing in a timely manner a "notice of commencement" with the owner of the property where the work is to be performed prior to any work and permitting is strongly recommended. In Florida, for example, the notice of commencement must be filed within 40 days of commencement of the project. Also be mindful that the date of commencement may not be the day the crews arrive at the job site, but could begin, like in Florida, as early as the day fabrication of materials for the project begins. Naturally, that can be a grey area but best not to create potential problems and file well in advance. Check with a reputable construction attorney in your area to obtain the lien and bond rules and regulations in your state as they all vary dramatically. Filing a "notice of commencement" or "notice to owner" on all fence jobs may become cumbersome, especially for lower dollar jobs, and continued on page 34