Liens Are Just One Way To Collect Debt – Other Best Collection Practices

Liens Are Just One Way To Collect Debt   Other Best Collection PracticesI love a great article about collection practices.   Not only is a topic I’ve written about in the past (see posts from this blog here, and from the Construction Law Monitor here), but it’s one of the more important topics for those in the construction industry.

Consider the “bad debt calculator” on Construction Indemnity Group’s website.  I love this calculator, because it puts the tragedy of bad debt in your face.   Take a modest amount of bad debt ($25,000), and a candid profit margin (5%), and you’ll see that it takes $500,000 of revenue to recover the lost income.   Amazing.

Last week, Melissa Brumback’s Construction Law in North Carolina blog posted a blog post with “8 Best Collection Practices.”   The article does a great job of hitting on the things you can do to minimize your bad debt – and things, that we’ve even said over and over:   Be careful when extending credit, have a written contract, and don’t let too much time pass before implementing your collection procedures.

These, of course, are just a few tips.  The post does a great job of enumerating each tip and discussing their importance, so there is not need for me to regurgitate it here…just take a look at Melissa’s post for more.

,

Scott Wolfe Jr

About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of The Lien and Credit Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.

One Pingback/Trackback