Every Friday, we select a few articles from the week that we think are worth your time as a construction financial manager (CFM). We look for compelling articles not only about financial topics, but about business, technology, and…Read More
Credit Policy ArticlesRSS feed for this section
A credit policy is a set of guidelines that: (1) are used to determine which customers are extended credit and billed; (2) set the payment terms for parties to whom credit is extended; (3) define the limits to be set on outstanding credit accounts; and (4) outline the steps or procedures used to deal with delinquent accounts. When it’s broken down into its component parts, a credit policy seems to be an encapsulation of how risk averse a company is vis-a-vis extensions of credit and other monetary policies with respect to accounts receivable. For most businesses, especially those in the construction industry, a sound credit policy should be an integral part of the company’s business plan, monetary policy, and overall risk-management strategy.
Credit policies are critical documents for nearly every organization, but especially for those B2B businesses who manage trade credit. Nearly every construction industry business is in this position, as construction materials, labor, and services are typically furnished and…Read More
Every day, credit professionals are challenged to handle sensitive financial situations for businesses. They are trusted to analyze complex situations and to make an educated judgment about how to financially interact with other companies. This is a big job. It can…Read More
On the surface, extending credit to customers seems like a no-brainer; it’s an incredible way to attract and retain customers and build long-term, profitable relationships – but there are significant risks involved too. Extending credit is easy, but…Read More
Everybody at the Construction Payment Blog, and the whole zlien team, wishes you a Happy New Year. Make that resolution to improve your credit and A/R easy by instituting a thorough credit & lien policy and sticking to…Read More
A thorough Lien Policy can form the backbone of a strategic A/R collection plan. Implementing a lien policy can reinvent a company’s receivables, which leads to less bad debt and fewer write-offs.
Getting Paid in the Construction Industry Is Tough
Getting Paid in…Read More
Before getting into the ins and outs of Lien Policy, and lien strategy, it’s important to note that filing a lien is only one step in the larger scheme of lien strategy as it…Read More
Financial risk is an unfortunate part of every construction project, and it just gets riskier the further away a company is from the money.
“Financial risk” on a construction project is an expansive topic, and includes problems with under-funded or underbid…Read More
Unfortunately, the failure rate of construction industry participants is high. This means that the bankruptcy or pending bankruptcy of a contractor is more common than many people may think, and definitely not an unheard-of reason for payment problems….Read More
First, I’ll just get it out of the way and let you know I’m not talking about getting bailed out by the government. Although, becoming “too big to fail” is a good place to be.
So, what is the mechanism by…Read More